The Federal Communications Commission’s Enforcement Bureau has reached a $7.4 million settlement with Verizon to resolve an investigation into the company’s use of personal consumer information for marketing purposes. The investigation uncovered that Verizon failed to notify approximately two million new customers, on their first invoices or in welcome letters, of their privacy rights, including how to opt out from having their personal information used in marketing campaigns. A phone company is generally prohibited from accessing or using certain personal information except in limited circumstances like marketing, but only after getting the customer’s approval. It can obtain approval through either an “opt-in” or “opt-out” process. When that process is not working properly, the company must report the problem to the FCC within five business days.
During its investigation, the Enforcement Bureau learned that, beginning in 2006 and continuing for several years thereafter, Verizon (a) failed to generate the required opt-out notices to approximately two million customers, (b) failed to discover these problems until September 2012, and (c) failed to notify the FCC of these problems until January 18, 2013, 126 days later.