WASHINGTON-The Federal Trade Commission last week filed civil complaints against five data brokers, urging the court to find that the data brokers violated the FTC Act and that they must give up any money they obtained from the practice of obtaining and selling customer call records.
“The account holders have not authorized the defendants to obtain access to or sell their confidential customer phone records. Instead, to obtain such information, defendants have used, or caused others to use, false pretenses, fraudulent statements, fraudulent or stolen documents or other misrepresentations, including posing as a customer of a telecommunications carrier, to induce officers, employees or agents of telecom carriers to disclose confidential customer phone records,” reads the complaint.
In a press release, the FTC thanked the Federal Communications Commission, Cingular Wireless L.L.C., Sprint Nextel Corp. and Verizon Communications Inc. for their assistance.
“Trafficking in consumer’s confidential telephone records is outrageous. It robs consumers of their privacy and exposes them to everything from snoops to stalkers. We intend to put a stop to it,” said Lydia Parnes, director of the FTC’s Bureau of Consumer Protection.
Earlier this year, the FTC sent warning letters to 29 companies.
“I applaud the FTC for taking strong enforcement action against firms that illegally trade in wireless phone records. These offenders are sophisticated data thieves who will only stop their illegal behavior when confronted with strong criminal penalties. We hope this sends a clear message to individuals and companies who seek to illegally market call record information,” said CTIA President Steve Largent. “Today’s enforcement action by the FTC provides further support for the enactment of rules and laws that target the thieves who are engaged in this illegal behavior.”
After a lull, action on the customer-call-records scandal, which erupted in early January following a segment aired on the CBS Evening News, has heated up again. Last month, the House of Representatives unanimously passed the Telephone Records and Privacy Protection Act of 2006, which criminalizes pretexting-the practice of impersonating someone else to get access to their records. The Telephone Records and Privacy Protection Act would create prison terms of up to 20 years and fines of up to $500,000 including penalties for using the records to commit crimes against law enforcement or domestic-violence victims.
Another bill aimed at changing the way telecommunications carriers protect customer call records is still awaiting House action. Similar legislation in the Senate could also be considered at any time.
“The rules carriers have been required to follow are about to become more stringent,” said John Guerra in Billing World and OSS Today, an industry newsletter. “Whether telecom carriers like it or not, they are at the center of the privacy problem. The FCC for years has had customer proprietary network information rules designed to protect the privacy of phone customers, but apparently phone companies themselves are responsible for customer information reaching the street. Telecom carriers have always played fast and loose with customer information, regardless of their claims to the contrary. They regularly sell customer name, address and phone number information to large telemarketing firms.”
Also last week, the FCC received comment on five specific measures proposed by the Electronic Privacy Information Center on the topic last August. EPIC asked that the FCC implement more stringent rules to protect customers’ call records. The wireless industry opposed the EPIC petition.
“It is extremely important that the FCC adopt rules that protect personal information while giving consumer complete control over their own data. The current rules are not getting that job done,” said David Bergmann, chairman of the telecommunications committee of the National Association of State Utility Consumer Advocates.
Action is also occurring at the state level in both legislatures and the courts.
