TerraCom, YourTel to Pay $3.5M to Resolve Consumer Privacy Violations

The Federal Communications Commission's Enforcement Bureau has entered into a $3.5 million settlement with TerraCom, Inc. and YourTel America, Inc., resolving an investigation into whether the companies failed to properly protect the confidentiality of personal information they received from more than 300,000 consumers. This settlement also resolves the FCC's investigation into YourTel's failure to comply with FCC instructions to remove ineligible Lifeline subscribers which resulted in over-billing of the federal program.

A thorough Enforcement Bureau investigation found that the companies' vendor stored consumers personal information on unprotected servers that were accessible over the Internet. The companies' failure to provide reasonable protection for their customers' personal information -- including names, addressees, Social Security numbers, driver's licenses, and other sensitive information -- resulted in a data breach that permitted anyone with a search engine to gain unauthorized access to the information. The settlement also resolves an investigation into YourTel's failure to timely de-enroll Lifeline subscribers. As a condition of settlement, the companies will pay a $3.5 million civil penalty. The companies will also notify all consumers whose information was subject to unauthorized access, provide complimentary credit monitoring services for all affected individuals, and undertake additional measures to mitigate any potential harm to consumers.