FTC pushes for civil penalties against pretexters

The Federal Trade Commission asked lawmakers for authority to assess civil penalties against individuals and firms that obtain consumer phone records under false pretenses, a practice known as pretexting that policymakers would like to see wireless carriers do more to prevent.
“Civil penalties are important in these areas (pretexting, data security and spyware) where our traditional equitable remedies, including consumer restitution and disgorgement, may be impracticable or not optimally effective in deterring unlawful acts,” said the FTC in written testimony for a Senate Commerce Committee hearing. “Restitution is often impracticable in these cases because consumers suffer injury that is either non-economic in nature or difficult to quantify. Likewise, disgorgement may be unavailable because the defendant has not profited from its unlawful acts, for example, in cases we bring against companies failing to maintain reasonable safeguards to protect sensitive consumer data.”
Congress last year criminalized pretexting. In a footnote in its congressional testimony, the FTC said efforts to crack down on pretexting continue, and that the new law criminalizing it likely will lead to investigations that can be referred to law enforcement authorities.
The House and Senate want wireless and wireline telecom carriers to put mechanisms in place to better protect subscribers’ phone records, including lists of calls made and the dates and duration of calls. The mobile phone industry opposes additional pretexting legislation, and was irked when the Federal Communications Commission recently ordered cellular operators to do more to safeguard customer proprietary network information, or CPNI.
The FCC recently proposed fines of $100,000 against Amp’d Mobile Inc., Easterbrooke Cellular Corp. and CTC Communications Corp., and smaller fines against several other wireless carriers, for failing to comply with regulations designed to keep consumer phone records out of the hands of data brokers and others.