Verizon has agreed to pay $7.4 million in a settlement to the FCC after the telecom was accused of improperly using customers' information to market new products.
The settlement will bring an end to the privacy investigation that found Verizon did not give users the option to opt-out from the marketing scheme.
"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," said Travis LeBlanc, acting chief for the Federal Communications Commission (FCC) Enforcement Bureau.
On top of the $7.4 million, Verizon will also be required to notify users on how to opt-out of its marketing services on every bill it issues for the next three years.
Verizon began failing to notify users on how to opt-out in 2006, and around 2 million customers had information used for marketing without their consent. The oversight went unnoticed until 2012 and Verizon did not notify the FCC of the issue until 2013, 126 days after the issue had been noticed instead of within the mandated five-day period.
"It is plainly unacceptable for any phone company to use its customers' personal information for thousands of marketing campaigns without even giving them the choice to opt out," continued LeBlanc.
Verizon's way of notifying users of opt-out rights is to send a notice to new customers with the first bill. Starting in 2006, Verizon failed to send opt-out notices to the 2 million users that were affected.
Despite this, the failure to send out the notices was not intentional and "did not involve a data breach or an unauthorized disclosure of customer information to third parties," said Edward McFadden, a Verizon spokesperson. "The issue here was that a notice required by FCC rules inadvertently was not provided to certain of Verizon's wireline customers before they received marketing materials from Verizon for other Verizon services that might be of interest to them."
FCC Chairman Tom Wheeler also sent Verizon a rather strongly worded letter in late July saying he was "deeply troubled" by Verizon's decision to throttle customers on its unlimited data plans.
Verizon has said it takes FCC decisions seriously and it will comply with regulatory mandates.
