Carriers Still in FCC Sights, Despite Subpoenas of Internet Sellers of Cell Records
The FCC’s focus in a probe into cellphone data sales remains on wireless carriers and their privacy procedures, sources said Mon. That’s despite disclosure Fri. the Commission subpoenaed owners of 2 websites that sell cellphone customer data and despite the FCC’s working with the FTC on the matter. Fri., the FCC brought together major wireless carriers to discuss how they protect customer records (CD Jan 23 p1). The issue heated up Mon., as T-Mobile filed suit in Wash. state under criminal profiteering laws, pursuing firms the carrier says traffic in cell records.
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“The FCC can work with the FTC to look at the scenarios involved,” said a regulatory source: “It sounds like most of the situations involved focus on the carriers themselves. The FCC doesn’t know that until they delve in.” The FCC’s options are varied, the source said: “They could turn over items potentially to the FTC and the FTC does have authority. They could turn it over to prosecutors. Fraud is fraud… They could also help develop best practices for carriers -- what are the ruses or schemes used, and how to avoid them.”
The FCC appears to be “trying to figure out if someone is violating” customer proprietary network information regulations, said a 2nd source. “The quickest way to figure out where the companies are getting the data is going right to the companies and requesting the data. The FCC jurisdiction over carriers gives them the hook to get into this. That’s sufficient under the law.”
The FCC released paperwork on subpoenas issued to 2 Internet sellers of cell records -- LocateCell.com and DataFind.org - in releasing citations against the 2 on allegations of failing to respond to the subpoenas. The FCC could fine the firms $97,500 if they fail to comply, the citations said. Chmn. Martin indicated Fri. subpoenas had been issued but refused to name targets.
T-Mobile is ready “to take similar legal action” against other companies that sell customer records, the firm said. “To further safeguard the privacy of our customers, T-Mobile is taking action to prosecute these online data brokers to the fullest extent permitted by the law,” said Dave Miller, gen. counsel of T-Mobile USA: “For the protection of all wireless customers, their illegal actions must be stopped.”
A D.C. lawyer specializing in privacy told us firms like LocateCell.com and DataFind.org probably mine data 2 ways: “Corrupt” carrier workers take money to leak data, or data firms “pretext,” having operatives call carriers and, using a script, snooker customer service employees into providing information. Most probably use both methods, the source said.
Wireless carriers aren’t alone in having workers sell them out, the source said: “That happens in every industry to some degree.” Pretexting is also common across industries but wireless carriers face more risk as they compete to be seen as customer friendly.
“One way carriers distinguish themselves is customer service,” the source said, noting that bankers had similar problems that spurred Congress to pass the 1999 Gramm- Leach-Bliley Act. Under the law, banks must provide customers annual statements on their privacy policies, and pretexting is a crime.
The FCC and FTC inquiries will boost pressure on carriers to beef up protection. “There are obligations of varying degrees to safeguard the information, to protect it, but nothing is foolproof,” the source said. “If you misplace something, you don’t want to make it impossible to get [account] information.”