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Paul Zimmerman
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AT&T Forced to pay FCC $25 Million for Failing to Safeguard Customer Information

As a result of employees at call centers wiping the personal information of 280,000 customers, AT&T is paying the Federal Communications Commission (FCC) $25 million to settle the matter. The commission alleged that AT&T failed to safeguard the personal information of their customers. 

According to the FCC, employees at call centers in Mexico, Colombia and the Philippines, stole names, social security numbers and additional account information without authorization. The stolen data was then “unlocked” and provided to third parties who were trafficking in stolen or secondary market phones. This put AT&T on the hook for violating Sections 222 and 201 of the Communications Act, which requires carriers to take reasonable steps to ensure that customers’ personal information is secure.

In addition to paying the substantial fine, AT&T will be appointing a senior compliance manager, who will be required to implement a new security program. Further, the carrier has pledged to notify all customers whose accounts were accessed, and pay for all credit monitoring services for customers whose information was compromised as a result of the breach.

While this action by the FCC was not targeted at the Hospitality industry, it serves as a reminder that regulatory agencies are jumping on the proverbial bandwagon to initiate enforcement actions to protect consumer personal information; the Federal Trade Commission (FTC) has initiated the majority of actions for data security breaches.  Consequently, businesses need to fully understand those regulatory bodies scrutinizing their operations.  This latest case further serves as a stark reminder that the failure to diligently protect consumer personal information poses dire consequences in the form of hefty payments (whether characterized as fines or settlements).  

This article is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.