FCC hits Verizon with record $7.4 million privacy penalty over marketing violations

Verizon failed to inform 2 million customers of their right to opt out of certain marketing campaigns, and for that the company will pay $7.4 million to the U.S. Treasury.

In a press release issued on Wednesday morning, the [company]FCC[/company] explained that the penalty stems from [company]Verizon’s[/company] failure to notify some customers on their initial phone bill that it would use their personal information, including calling records, to promote other Verizon services.

A related consent decree further states that Verizon voluntarily notified the FCC in January of 2013 after it determined that “a subset of its consumer, small business and medium business customers did not receive the opt-out notice on their initial bill.” In an ensuing investigation, the company told the agency that it used the customer information in thousands of internal marketing campaigns dating from 2006.

The FCC describes the $7.4 million penalty as the “largest such payment in FCC history … related solely to the privacy of telephone customers’ personal information.”

While the number is eye-catching, the actual offense appears fairly minor: Verizon failed to include an opt-out notice on some phone bills, leading some customers to be subject to more marketing than they would like. While this is still technically a privacy violation, it’s hardly as egregious as some of those committed recently by tech and app companies. It’s possible that the Verizon penalty is intended in part to be a warning signal to the industry at a time when carriers are considering ways to make money off the consumer data they possess.

Here’s a link to the consent decree, which sets out all the specifics.