Telecommunications giant Verizon has agreed to a $7.4 million settlement with the U.S. Federal Communications Commission (FCC) in connection with the company’s use of personal consumer information for marketing purposes.
The Federal Communications Act requires phone companies to protect the privacy of consumer information, and limits the use of that information for marketing purposes without the consent of the consumer. Companies such as Verizon often use an “opt-in” or “opt-out” process in their email marketing efforts to verify consumer consent, and must notify the FCC of any problems with its verification system within five business days.
According to the FCC’s Enforcement Bureau, Verizon failed to generate the required opt-out notices in mailings to approximately two million consumers beginning in 2006. The failure was reportedly not detected until September 2012, but Verizon failed to notify the FCC until early 2013, more than four months after discovering the problem.
In addition to making a payment of $7.4 million (according to the FCC, the largest payment ever for settling a case involving the privacy of telephone customers’ personal information), Verizon will also be required to adopt a stringent program to protect customer privacy and to monitor the effectiveness of that program.