FTC Fines DirecTV $5M for Privacy Violations | AccountingWEB

FTC Fines DirecTV $5M for Privacy Violations

Signaling that the federal government is serious about enforcing the national Do-Not-Call Registry, the Federal Trade Commission has fined a satellite television operator more than $5 million.

The FTC contends that DirecTV and companies it hired to promote its programming, have violated the do-not-call law since October 2003. The FTC announced the company would pay a $5.3 million fine.

The do-not-call list has been lauded as a government success story, with 110.4 million residential and mobile telephone numbers registered, the Washington Post reported. The record fine against DirecTV has also been applauded, but some critics say more should be done to punish companies that lose consumers' personal information.

Bob Sullivan, of msnmbc.com, noted that DSW Shoe Warehouse, which lost account information on 1.4 million people, was required to agree to auditing, but did not have to pay a fine.

“Someone might interpret the message this way: Disturb me at dinner with a phone call, pay a $5 million fine; lose all my personal information, face a press release,” he wrote.

Privacy advocates have also pointed out that some retailers are asking customers for their phone numbers at the checkout, which opens the door for those annoying phone calls, even if they are on the do-not-call list.

Voluntarily giving out a phone number while making a purchase may establish a business relationship, and companies can call individuals on the do-not-call list with whom they have prior business relationships, Chris Hoofnagle of the Electronic Privacy Information Center, told ABCNews.com.

Other drawbacks, according to Hoofnagle: "Consumers do not understand that giving out the phone number allows the business to buy more information about the consumer through a system known as enhancement." Companies that specialize in data enhancement, such as ChoicePoint, can generate marketing profiles, credit reports, background checks and even e-mail addresses. "So getting the phone number opens you up not just to getting phone calls, but to spam," Hoofnagle said.

Sullivan wrote that nearly 20 bills have been introduced in Congress to deal with the data leak issue, but none have passed and commercial data brokers “continue their unfettered trade in America's private information.” Pointing to the DirecTV case, he wrote, “Let's hope Washington adopts the privacy issue with the same vigor, and similar results.”

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