AT&T To Pay $25M To Settle Investigation Into Three Data Breaches

If anyone doubted the FCC was serious about getting more into data breach/security enforcement, they should read this settlement with AT&T released today (pdf).

From the order:

1. The Enforcement Bureau (Bureau) of the Federal Communications Commission (Commission) has entered into a Consent Decree to resolve its investigation into whether AT&T Services, Inc. (AT&T or Company) failed to properly protect the confidentiality of almost 280,000 customers’ proprietary information, including sensitive personal information such as customers’ names and at least the last four digits of their Social Security numbers, as well as account-related data known as customer proprietary network information (CPNI), in connection with data breaches at AT&T call centers in Mexico, Columbia, and the Philippines. At least two employees believed to have engaged in the unauthorized access confessed that they sold the information obtained from the breaches to a third party, known to them as “El Pelon.” The breaches resulted in the personal information of 51,422 AT&T customers’ information being used to place 290,803 handset unlock requests through AT&T’s online customer unlock request portal. The investigation also examined whether AT&T promptly notified law enforcement authorities of the security breaches involving its customers’ CPNI.

2. The failure to reasonably secure customers’ proprietary information violates a carrier’s statutory duty under the Communications Act to protect that information, and also constitutes an unjust and unreasonable practice in violation of the Act. These laws ensure that consumers can trust that carriers have taken appropriate steps to ensure that unauthorized persons are not accessing, viewing or misusing their personal information. The Commission has made clear that it expects telecommunications carriers such as AT&T to take “every reasonable precaution” to protect their customers’ data, and that it is committed to protecting the personal information of American consumers from misappropriation, breach, and unlawful disclosure. In addition, the laws that require prompt disclosure of data breaches to law enforcement authorities, and subsequently to consumers, aid in the pursuit and apprehension of bad actors and provide valuable information that helps affected consumers be proactive in protecting themselves in the aftermath of a data breach. To settle this matter, AT&T will pay a civil penalty of $25,000,000 and develop and implement a compliance plan to ensure appropriate processes and procedures are incorporated into AT&T’s business practices to protect consumers against similar data breaches in the future. In particular, AT&T will be required to improve its privacy and data security practices by appointing a senior compliance manager who is privacy certified, conducting a privacy risk assessment, implementing an information security program, preparing an appropriate compliance manual, and regularly training employees on the company’s privacy policies and the applicable privacy legal authorities.

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