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Data Breach Costs Two US Telecoms Plenty

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Data Breach Costs Two US Telecoms Plenty

 
July 15, 2015

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  By Joe Rizzo, TMCnet Contributing Writer
 


How much money something costs greatly affects how that something is used. In general, the higher the cost, the more options are available and there is nothing wrong with paying extra in order to get more. However, when it comes to telecommunications, there is an expectation that your personal information is safe and secure from prying eyes regardless of your financial status.


Apparently, this was not the case with TerraCom and YourTel America, two U.S. based telecoms. TerraCom is based in Oklahoma City and offers mobile Lifeline service in 14 states. YourTel America is based in Kansas City and provides mobile Lifeline service in eight states and wireline Lifeline service in three.

According to the FCC (News - Alert), the Lifeline program has provided a discount on phone service for qualifying low-income consumers to ensure that all Americans have the opportunities and security that phone service brings. In 2005, Lifeline discounts were made available to qualifying low-income consumers on pre-paid wireless service plans in addition to traditional landline service.

You will note that part of that description includes “security”, something that it appears these two companies forgot about. A couple of years ago in 2013, an investigative reporter found customer records from the companies’ low-income Lifeline programs online. Over a two month period, the reporter was able to access more than 128,000 confidential records and documents.

This information was submitted by subscribers and applicants for Lifeline service and included their names, addresses, Social Security numbers and driver’s licenses. In the wrong hands this information could cause havoc for these low-income U.S. residents.

The bottom line is that these two telecoms were saving and maintaining all this information for over 300,000 customers on unprotected servers which apparently were easily accessible over the Internet. The reporter was able to consistently gather information from almost half of the customers.

I’m sure that most of us are familiar with the term “the pot calling the kettle black”, meaning  the person accusing (the pot) is understood to share some quality with the target of their accusation (the kettle). It seems that when the investigative reporter called TerraCom and YourTel America to report that he was able to gain access, they reported the reporter to the FCC for data breach.

The response from Travis LeBlanc, chief of the FCC’s enforcement bureau, was “Consumers rightly expect that companies will take every reasonable precaution to protect their personal information. It is a breach of customer trust for a company to promise to protect personal information while failing to take reasonable measures to protect sensitive customer information from unauthorized access by anyone with a search engine. The settlement ensures that the companies take “concrete steps to improve security.”

The settlement that is being referred to is the fact that the sister mobile and telecom service providers are being fined $3.5 million. In addition, both companies have to notify all of their customers involved and provide complimentary credit monitoring services. The companies have also agreed to take additional steps toward improving their security practices.

This is not the first time that the FCC has looked into YourTel America’s practices. In 2012, the FCC told the telecom to remove ineligible customers from the program, which it failed to do for about a year. This resulted in the company overbilling the Lifeline program.



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