Media Contact:
Will Wiquist, 202-418-0509
Will.Wiquist@fcc.gov
For Immediate Release
TERRACOM AND YOURTEL TO PAY $3.5 MILLION TO RESOLVE
CONSUMER PRIVACY & LIFELINE INVESTIGATIONS
FCC Takes Further Steps to Protect Consumers' Personal Information
WASHINGTON, July 9, 2015 - 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
Commission 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, addresses, 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.
Consumers rightly expect that companies will take every reasonable precaution to protect their
personal information, said Travis LeBlanc, Chief of the FCC's Enforcement Bureau. 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. This settlement ensures that these companies take concrete steps
to improve their security practices and prevent breaches like this from happening again.
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. This information had been
collected by the companies to demonstrate eligibility for the Lifeline program, which is a
Universal Service Fund program that provides discounted phone services for low-income
consumers.
The settlement also resolves an investigation into YourTel's failure to timely de-enroll Lifeline
subscribers. In 2012, the Commission instructed YourTel to de-enroll subscribers who were
ineligible for Lifeline-supported service. The company continued to provide this service to a
number of ineligible subscribers during 2012 and 2013. As a result, the company overbilled the
Lifeline program by seeking reimbursement for serving those subscribers.
Additionally, the companies have committed to improve their privacy and data security practices
in concrete ways. They will conduct an assessment of any other privacy risks, implement a
security program to protect written information, maintain strict oversight of their vendors, and
assure that a senior corporate manage is a certified privacy professional. They will also
implement a data breach response plan, train their employees on privacy and security awareness,
and file regular compliance reports with the Commission.
The failure to reasonably secure customers' proprietary information, including their personal
data, violates a carrier's duty under Section 222 of the Communications Act, and also constitutes
an unjust and unreasonable practice in violation of Section 201 of the Act. The Commission
expects telecommunications carriers to take every reasonable precaution to protect their
customers' data.
The settlement with YourTel also requires the company to implement strong measures to
improve its compliance with Lifeline program rules. YourTel must designate a senior corporate
manager to serve as a compliance officer, develop a comprehensive compliance plan, and report
regularly to the Enforcement Bureau on compliance, as well as take other steps designed to
ensure the company does not overbill the Lifeline program.
For more information about the FCC's rules protecting the privacy of consumers' personal
information, see: http://www.fcc.gov/encyclopedia/consumer-publications-library#Privacy
The TerraCom/YourTel Order and Consent Decree are available at:
https://apps.fcc.gov/edocs_public/attachmatch/DA-15-776A1.pdf
The TerraCom/YourTel Notice of Apparent Liability, which led to today's settlement, is
available at: https://apps.fcc.gov/edocs_public/attachmatch/FCC-14-173A1.pdf
###
Office of Media Relations: (202) 418-0500
TTY: (888) 835-5322
Twitter: @FCC
www.fcc.gov/office-media-relations
This is an unofficial announcement of Commission action. Release of the full text of a Commission order
constitutes official action. See MCI v. FCC, 515 F 2d 385 (D.C. Cir. 1974).
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