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Verizon Pays $7.4 Million To Settle FCC Privacy Investigation

samzenpus posted about 1 month ago | from the pay-up dept.

Verizon 50

An anonymous reader writes Verizon has agreed to pay $7.4 million because it did not notify customers before using their personal information in marketing campaigns. The FCC discovered that Verizon failed to alert around two million customers of rights that include telling customers how to opt out from having their personal information used. "In today's increasingly connected world, it is critical that every phone company honor its duty to inform customers of their privacy choices and then to respect those choices," Travis LeBlanc, Acting Chief of the FCC's Enforcement Bureau said.

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That'll teach them (5, Insightful)

grasshoppa (657393) | about 1 month ago | (#47820955)

Side note: How fast do you suppose Verizon wireless makes 7.4 million? 3 hours? 4?

Re:That'll teach them (4, Insightful)

Opportunist (166417) | about 1 month ago | (#47821029)

A better question, how much did they make selling this data?

Whether laws are heeded by corporations is dependent on a simple formula: what's to be gained by ignoring the law / (chance to get caught * fine). Unless that's below 1, the law becomes simply a cost factor to do business.

Re:That'll teach them (4, Insightful)

Ichijo (607641) | about 1 month ago | (#47821467)

And how much will each customer be reimbursed?

Re:That'll teach them (1)

rHBa (976986) | about 1 month ago | (#47822607)

$7.4M divided by "around two million customers", minus costs, they'll be lucky to get $3.50, better watch out for that godamn Lock Ness Monsta!!!

Re:That'll teach them (1)

rwise2112 (648849) | about a month and a half ago | (#47824595)

$7.4M divided by "around two million customers", minus costs, they'll be lucky to get $3.50, better watch out for that godamn Lock Ness Monsta!!!

Well, actually they will increase each customers bill by that amount because they didn't make as much money this year.

Re:That'll teach them (1)

Opportunist (166417) | about a month and a half ago | (#47830195)

Re... im...?

I'm sorry, my CFO dictionary doesn't contain that word, does it increase profit? If not, we don't need it.

Re:That'll teach them (3, Insightful)

Jane Q. Public (1010737) | about 1 month ago | (#47821553)

A better question, how much did they make selling this data?

Whether laws are heeded by corporations is dependent on a simple formula: what's to be gained by ignoring the law / (chance to get caught * fine). Unless that's below 1, the law becomes simply a cost factor to do business.

And even that equation is grossly unethical and doesn't backfire as often as it should. But it can, as Ford found out in the Pinto fiasco.

This is a ridiculously small settlement. How much is that per person? $3.70? AND -- this is just as big of a problem -- will ANY of those people who were actually harmed see any of that money?

This is what corporate cronyism (or what some people call "market capture") is all about. Government revolving door. It's a travesty and a tragedy. And it's also why I won't do business with Verizon.

Re: That'll teach them (0)

Anonymous Coward | about 1 month ago | (#47822043)

If you really want to stick to your guns you will have to stop doing business with 99% of businesses. They are all pretty much all the same... and good luck finding that 1% that is different. I can only think of one large corporation that comes close to being decent and that is Lowe's.

Re: That'll teach them (1)

Jane Q. Public (1010737) | about 1 month ago | (#47822751)

If you replaced "businesses" with "large corporations", and "99%" with "85%", I might agree.

Our economy is still mostly driven by small business. Most small businesses and government do not have their hands in each other's pockets like big corporations do. Which of course is part of the problem. Nobody should.

Re: That'll teach them (0)

Anonymous Coward | about a month and a half ago | (#47824177)

Small businesses provide essentials, big corps provide "essential" luxury services, like internet, TV, and cell service. I bet landlords, power lighting, farms, and construction makes up most of the "small businesses" from a revenue standpoint.

Re: That'll teach them (0)

Anonymous Coward | about a month and a half ago | (#47825669)

The top small business categories are: Health care and social assistance, Retail trade, Accommodation and food services, Manufacturing, Administrative and support and waste management and remediation services The bottom two are: Utilities and Agriculture, forestry, fishing and hunting. Construction is in the middle. source [census.gov]

Re:That'll teach them (1)

Anonymous Coward | about 1 month ago | (#47821929)

A proper punishment would have been to force them to switch to explicit, vountary opt in without any hidden or obvious fees for opting out, and no rebates of any kind for opting in for any such activities in the future.

Re:That'll teach them (0)

Anonymous Coward | about a month and a half ago | (#47825049)

With fines that actually hurt you get the conservatives crawling out of the woodwork to introduce legislation outlawing large jury verdicts and prohibiting the government from levying large fines. They are vigilant about making sure that the rule of law does not apply to their constituents in any meaningful way.

Re:That'll teach them (2)

Mitreya (579078) | about 1 month ago | (#47821039)

How fast do you suppose Verizon wireless makes 7.4 million? 3 hours? 4?

Also, how much compensation did the affected customers receive?
Even if the punishment were painful, why does FCC get all of it?

Verizon has agreed to notify customers of their opt-out rights on every bill for the next three years.

Oh, well, never mind. I guess customers got something out of this settlement after all. And in the fourth year, Verizon doesn't even have to notify them about their opt-out rights?

Re:That'll teach them (1)

onproton (3434437) | about 1 month ago | (#47821443)

Also, how much compensation did the affected customers receive? Even if the punishment were painful, why does FCC get all of it?

I was going to say, that doesn't really make sense. It is the customers that were harmed, they should get some sort of compensation for the breech of their privacy, shouldn't they?

Re:That'll teach them (0)

Anonymous Coward | about 1 month ago | (#47821503)

Customers got 3 years of notifications included with their bill, notifying them about their right to opt out. Excellent deal.

Re:That'll teach them (1)

ihtoit (3393327) | about 1 month ago | (#47822495)

opt *out*? That should be illegal, how about an opt *in*?

Opt outs piss me off. Takes me away from other stuff I could be doing like posting on slashdot.

Re:That'll teach them (4, Informative)

mythosaz (572040) | about 1 month ago | (#47821045)

Verizon's wireless has made as much as 5BN in a quarter recently, but has also had losing quarters too.

For cocktail napkin math and simplicity's sake, lets say they made 7.4BN last year, making this 1/1000th of their profit.

Wolfram says 525 minutes.

Re:That'll teach them (2)

NoNonAlphaCharsHere (2201864) | about 1 month ago | (#47821063)

Yeah; that'll certainly be a deterrent next time. By income ratios, that's less than the average person pays for a parking ticket.

Re:That'll teach them (2)

rmdingler (1955220) | about 1 month ago | (#47821071)

I agree the fine is a punishment somewhere on the pain scale beneath fifty lashes with a wet noodle.

The real downside for Verizon will be the outrage that drives thousands of their customers to... another evil carrier.

Sigh! Never mind.

Re:That'll teach them (0)

Anonymous Coward | about 1 month ago | (#47821685)

That's wishful thinking, people in the country (US) have proven they really don't care about privacy. As has been proven from the NSA and other US agencies, law enforcement, from whistle blowers.

I doubt Verizon will lose out on to many customers, and the next question people who are concerned with privacy should have, are all the other monopolistic providers doing the same only they haven't be caught? Lets say they are but their informing customers on their bills, how many are going to read fine print? Forcing companies to have a separate sheet or paper clearly printed in a normal font, informing people of their practices, however government refuses to force changes in companies behavior.

Its typical government, they gave Verizon 3 years to notify and make sure the billing information includes the fact Verizon is selling off your data to 3rd parties, and you can opt out, but after the 3 years they can go back to business as usual. And the FCC or really any other agency isn't going to make sure companies aren't collecting data on customers who "opted out"!

Re:That'll teach them (0)

Anonymous Coward | about 1 month ago | (#47821195)

Hopefully anybody with at least an average IQ will never buy a used car from an FCC official...

Re:That'll teach them (1)

Somebody Is Using My (985418) | about 1 month ago | (#47821837)

Regardless of how quickly the money keeps rolling in, I'm sure that this defeat will allow Verizon to hike their rates to make up the "deficit".

That this sort of thing is allowed as "opt-out" is ridiculous anyway. Obviously this data has value to Verizon; they should be bargaining with its customers for its use. "Want to save $5.00 per year on your cell-phone bill? Click here to let us market your personal information." That they can essentially just take it from people without recompense unless they happen to object (via an unlikely to be read clause in some fine print at the bottom of a bill) seems a lot like a robber being allowed to take a person's TV unless he actually complains while the theft is taking place. "Um, excuse me, I was watching that..."

If the FCC really wants to appear to be standing up to the telecom industry, they ought to just tell them to make this sort of thing opt-in.

Re:That'll teach them (1)

ihtoit (3393327) | about 1 month ago | (#47822525)

yeah, you beat me to it. I've had to "opt out" of the NHS giving my personal data to some private company for pharmaceutical companies to trade in, I've had to "opt out" of HMRC and the DWP giving my personal data to employment agencies who are trying to lock me in to exclusive zero-hours contracts (two things: I don't do exclusive and I DO NOT do zero-hours contracts), I've withdrawn from the TPS because I'm pretty fucking sure those cunts are selling my phone number to telemarketers as a valid number - the TM shit started the same week as I signed up on the telephone preference service on the understanding that a DNC tag was going next to my UNLISTED NUMBER!

Re:That'll teach them (1)

mikeiver1 (1630021) | about 1 month ago | (#47822657)

One one thousand, two one thousand, three one thousand... that should be about right if the bill I get each month from the greedy pricks is any indication.

Re:That'll teach them (1)

Aryeh Goretsky (129230) | about 1 month ago | (#47823171)

Hello,

It's such a slight slap on the wrist that I doubt Verizon even felt it.

According to Wikipedia, Verizon made $120.55B in profits last year. That's a little over $330M a day.

Or about, $13.8M an hour.

So, a $7.4M fine means they paid the equivalent of 32.4 minutes of profit.

Regards,

Aryeh Goretsky

Re:That'll teach them (0)

Anonymous Coward | about a month and a half ago | (#47823665)

Verizon made $120.55B in profits last year.

They had 120B in revenu. Not profit.

Where does the money go? (2, Insightful)

Anonymous Coward | about 1 month ago | (#47820975)

What good does this do for the 2 million customers whose personal information was illegally used?

Opt out (1)

Iamthecheese (1264298) | about 1 month ago | (#47821079)

There is nothing acceptable about "I won't shit on you as long as you jump through my hoop". It doesn't matter whether it's a simple email or the hoop is more difficult, "opt out" needs to end.

Re:Opt out (0)

Anonymous Coward | about 1 month ago | (#47821113)

Fuck off communist. How dare you suggest regulating what corporations can and cannot do. This is 'murica not some sissy, pissy Eurofag country.

Re:Opt out (0)

Anonymous Coward | about 1 month ago | (#47822069)

You can opt out of his posts, so quit your whining. (but i still havent quite figured out how...)

Re:Opt out (0)

Anonymous Coward | about 1 month ago | (#47822109)

Cry moar.

So nice to see the FCC focusing on the big issues. (3, Funny)

Jahoda (2715225) | about 1 month ago | (#47821147)

These are the issues that truly threaten consumer freedom in the marketplace. It's the reason why the FCC was even created: to regulate how telecommunications companies use customer data for marketing. And with such a punishment as this, all I can tell you is that it's a warm sunny day to be an American here in the land of fair-play, privacy, and opportunity.

Re:So nice to see the FCC focusing on the big issu (1)

ewieling (90662) | about 1 month ago | (#47821535)

I can't tell if you are being sarcastic or are simply an idiot. I understand the desperate desire for some part, any part of government to protect privacy, but no matter how much you wish, the FCC was NOT created to protect "consumer freedom in the marketplace". One could argue the FCC prevented "consumer freedom in the marketplace" in the area of telephony by creating a telecom monopoly aka AT&T for around 40 years. The FCC was created by the Communications Act of 1934. To quote Wikipedia:

The stated purposes of the Act are "regulating interstate and foreign commerce in communication by wire and radio so as to make available, so far as possible, to all the people of the United States a rapid, efficient, nationwide, and worldwide wire and radio communication service with adequate facilities at reasonable charges, for the purpose of the national defense, and for the purpose of securing a more effective execution of this policy by centralizing authority theretofore granted by law to several agencies and by granting additional authority with respect to interstate and foreign commerce in wire and radio communication, there is hereby created a commission to be known as the 'Federal Communications Commission', which shall be constituted as hereinafter provided, and which shall execute and enforce the provisions of this Act."

Re:So nice to see the FCC focusing on the big issu (1)

Jahoda (2715225) | about a month and a half ago | (#47833813)

"I can't tell if you are being sarcastic or are simply an idiot"

. Well, my friend - between the two of us, only one doesn't get sarcasm, and only one calls people "idiot" on the internet. I suppose that's something for you to think about, eh?

Re:So nice to see the FCC focusing on the big issu (0)

Anonymous Coward | about 1 month ago | (#47822001)

unfortunately the fcc is now nothing more than puppets, whose strings are pulled by telecom and cable megacorps.

A Sneeze in A Tornado (0)

Anonymous Coward | about 1 month ago | (#47821409)

$7.4M? That *it*?

Ahh, corporate America - where fines are just a minor line item on the the quarterly report and no more shame is felt paying them than paying for janitors at the corporate offices. Just the cost of doing business.

I'll go out on a limb and say that Verizon made a hell of a lot more than $3.70 per customer information sold.

That's nearly four dollars per violation!! (1)

OurDailyFred (1997042) | about 1 month ago | (#47821479)

The story says Verizon spammed nearly two million customers who didn't have a chance to opt in or opt out of their advertising. The $7.4 million dollars was probably cheaper than the campaign to reach those customers. I do hope someone in Washington D.C. helps the FCC find their testicles, even one testicle might help.

ODF

forget just informing them (4, Insightful)

onproton (3434437) | about 1 month ago | (#47821497)

These "automatic opt-ins" should be completely outlawed in every case. I can't come to terms with the notion that someone's inaction can mean that they agree - it should have to be a positive affirmation.

Re:forget just informing them (1)

krups gusto (2203848) | about 1 month ago | (#47821997)

FREE MARKET MAN is here to save the day!

Re:forget just informing them (1)

onproton (3434437) | about 1 month ago | (#47822347)

If only there were such a thing in this industry.

forget just informing them (1)

contrapunctus (907549) | about 1 month ago | (#47822003)

The police do it: They assume you comply with them searching your stuff if you don't "opt out" by yelling "I do not consent to this search" repeatedly...

Re:forget just informing them (1)

ihtoit (3393327) | about 1 month ago | (#47822549)

silence is not consent: per Munby J in re: G [2008] EWHC 400, para. 56

3$ per user (1)

MasseKid (1294554) | about 1 month ago | (#47821519)

That's a massive three whole dollars per user. I'm sure Big companies are taking notice at the going rate for privacy.

Does Verizon have a board of directors, CEO? (2)

Mister Liberty (769145) | about 1 month ago | (#47821637)

Then do unto them as they did to you. Publish anything you can find on or about them. Remember, doesn't necessarily have to be cheesy.

Re:Does Verizon have a board of directors, CEO? (0)

Anonymous Coward | about a month and a half ago | (#47823895)

Verizon: Meet the Board. Practically an invitation.

https://www.verizon.com/investor/bo_meettheboard.htm [verizon.com]

Settle an investigation? (0)

Anonymous Coward | about 1 month ago | (#47822363)

Isn't that also known as a payoff? Government agencies used to keep those things quiet, now they announce them proudly?

Great! (0)

Anonymous Coward | about 1 month ago | (#47822505)

Another "fine" that will get added to a list of bills that are paying off others' "fines" (BoA, *cough*, *cough*). Thanks.

How much each customer will get (1)

Deepa (3691893) | about a month and a half ago | (#47824603)

Hope everyone should get the payment

Cost of doing business (0)

Anonymous Coward | about a month and a half ago | (#47830547)

Cost of doing business. This will be passed on to the customers in their fees. Guess what...when the government fines a company, you pay for it.
I would really like to see the people responsible in the company have to pay with either a personal fine or time in jail. That would stop this crap. As it stands, the customers got screwed twice...when their info was sold and paying the fine.

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