On October 24, 2014, the Federal Communications Commission (FCC) announced its intention to fine two telecom companies $10 million for several violations of laws protecting the privacy of phone customers’ personal information.  This marks the FCC’s first data security case and the largest privacy action in the FCC’s history.

According to the FCC, TerraCom, Inc. and YourTel America, Inc. stored Social Security numbers, names, addresses, driver’s licenses, and other sensitive information belonging to their customers on unprotected Internet servers that anyone in the world could access.  The information was collected in connection with eligibility verification for the Lifeline program, the government’s telephone subsidy program for low-income Americans.  The companies allegedly breached the personal information of over 300,000 consumers through their lax security practices.

The privacy policies for the two companies stated that they had in place “technology and security features to safeguard the privacy of your customer specific information from unauthorized access or improper use.”  Nevertheless, the FCC’s asserts that from September 2012 through April 2013, the sensitive information they collected was apparently accessible via the Internet and readable by anyone.   Importantly, the FCC took issue with the fact that even after learning of the security breach, the companies allegedly failed to notify all potentially affected consumers, thus depriving the consumers of any opportunity to protect their personal information from misuse.

The FCC alleges that the carrier’s failure to reasonably secure their customer’s personal information violates the companies’ statutory duty under the Communications Act.    Specifically, the carriers had an alleged duty to protect the information, and the companies failure to do so constitutes an unjust and unreasonable practice in violation of the Act, as their data security practices lacked “even the most basic and readily available technologies and security features…”  Similarly, the FCC alleges that the companies’ deceptive and misleading representations of customer privacy protections, and their subsequent failure to notify, constitute unjust and unreasonable practices as well.

Travis LeBlanc, Chief of the FCC’s Enforcement Bureau, said, “Consumers trust that when phone companies ask for their…personal information, these companies will not put that information on the Internet or otherwise expose it to the world….When carriers break that trust, the [FCC] will take action to ensure that they are held accountable…”

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Photo of Jason C. Gavejian Jason C. Gavejian

Jason C. Gavejian is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. and co-leader of the firm’s Privacy, Data and Cybersecurity practice group. Jason is also a Certified Information Privacy Professional (CIPP/US) with the International Association of Privacy…

Jason C. Gavejian is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. and co-leader of the firm’s Privacy, Data and Cybersecurity practice group. Jason is also a Certified Information Privacy Professional (CIPP/US) with the International Association of Privacy Professionals.

As a Certified Information Privacy Professional (CIPP/US), Jason focuses on the matrix of laws governing privacy, security, and management of data. Jason is co-editor of, and a regular contributor to, the firm’s Workplace Privacy, Data Management & Security Report blog.

Jason’s work in the area of privacy and data security includes counseling international, national, and regional companies on the vast array of privacy and security mandates, preventive measures, policies, procedures, and best practices. This includes, but is not limited to, the privacy and security requirements under state, federal, and international law (e.g., HIPAA/HITECH, GDPR, California Consumer Privacy Act (CCPA), FTC Act, ECPA, SCA, GLBA etc.). Jason helps companies in all industries to assess information risk and security as part of the development and implementation of comprehensive data security safeguards including written information security programs (WISP). Additionally, Jason assists companies in analyzing issues related to: electronic communications, social media, electronic signatures (ESIGN/UETA), monitoring and recording (GPS, video, audio, etc.), biometrics, and bring your own device (BYOD) and company owned personally enabled device (COPE) programs, including policies and procedures to address same. He regularly advises clients on compliance issues under the Telephone Consumer Protection Act (TCPA) and has represented clients in suits, including class actions, brought in various jurisdictions throughout the country under the TCPA.

Jason represents companies with respect to inquiries from the HHS/OCR, state attorneys general, and other agencies alleging wrongful disclosure of personal/protected information. He negotiates vendor agreements and other data privacy and security agreements, including business associate agreements. His work in the area of privacy and data security includes counseling and coaching clients through the process of investigating and responding to breaches of the personally identifiable information (PII) or protected health information (PHI) they maintain about consumers, customers, employees, patients, and others, while also assisting clients in implementing policies, practices, and procedures to prevent future data incidents.

Jason represents management exclusively in all aspects of employment litigation, including restrictive covenants, class-actions, harassment, retaliation, discrimination, and wage and hour claims in both federal and state courts. He regularly appears before administrative agencies, including the Equal Employment Opportunity Commission (EEOC), the Office for Civil Rights (OCR), the New Jersey Division of Civil Rights, and the New Jersey Department of Labor. Jason’s practice also focuses on advising/counseling employers regarding daily workplace issues.

Jason’s litigation experience, coupled with his privacy practice, provides him with a unique view of many workplace issues and the impact privacy, data security, and social media may play in actual or threatened lawsuits.

Jason regularly provides training to both executives and employees and regularly speaks on current privacy, data security, monitoring, recording, BYOD/COPE, biometrics (BIPA), social media, TCPA, and information management issues. His views on these topics have been discussed in multiple publications, including the Washington Post, Chicago Tribune, San Francisco Chronicle (SFGATE), National Law Review, Bloomberg BNA, Inc.com, @Law Magazine, Risk and Insurance Magazine, LXBN TV, Business Insurance Magazine, and HR.BLR.com.

Jason is the co-leader of Jackson Lewis’ Hispanic Attorney resource group, a group committed to increasing the firm’s visibility among Hispanic-American and other minority attorneys, as well as mentoring the firm’s attorneys to assist in their training and development. He also previously served on the National Leadership Committee of the Hispanic National Bar Association (HNBA) and regularly volunteers his time for pro bono matters.

Prior to joining Jackson Lewis, Jason served as a judicial law clerk for the Honorable Richard J. Donohue on the Superior Court of New Jersey, Bergen County.