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FCC to fine carriers $10 million for breach of consumer privacy

TerraCom and YourTel are set to receive a $10 million penalty from the FCC after leaving sensitive consumer data available online and failing to inform its customers.
By
October 27, 2014
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You would have thought that companies would be more careful about how they store user data these days, but apparently not. The FCC plans to issue penalties to carriers TerraCom and YourTel worth a total of $10 million following a breach of consumer privacy.

This is the first time that the FCC has issued fines over data security and marks the largest privacy enforcement case in the body’s history. According to the FCC, the two companies left highly sensitive customer information, including addresses, driving license details, and social security numbers, in a format that could be accessed and easily read over the internet. This data was required by the carriers to assess eligibility for the Universal Service Fund’s Lifeline program, which offers discounted phone services for low-income consumers.

“Consumers trust that when phone companies ask for their Social Security number, driver’s license, and other personal information, these companies will not put that information on the Internet or otherwise expose it to the world,” Travis LeBlanc, Chief of the FCC’s Enforcement Bureau

Making matters worse, the companies then failed to notify consumers of the security breach despite being alerted to it. This left customers, all 305,000 of them, unaware that they might need to update details and take steps to protect themselves from data thieves.

Customer data protection has been hot topic for a while now and is a particularly difficult issue in an industry where long contract terms and high cancellation costs prevent dissatisfied consumers from taking their business to more secure companies. Perhaps the FCC’s intervention will prompt others to review their data security practises.