AT&T call centers sold mobile customer information to criminals

The company will pay a $25 million civil penalty to the FCC in a settlement

Employees at three overseas call centers sold hundreds of thousands of AT&T customer records, including names and Social Security numbers, to criminals who attempted to use the customer information to unlock stolen mobile phones, the U.S. Federal Communications Commission said.

More than 279,000 U.S. customers of AT&T were affected by the data breaches, originating in call centers in Mexico, Colombia and the Philippines, the FCC said. AT&T has agreed to pay a US$25 million civil penalty and create a new data security program in a settlement with the agency, announced Wednesday.

The $25 million settlement is the largest related to a data breach and customer privacy in the FCC's history, the agency said.

More than 290,000 requests to unlock mobile phones connected to the breached customer records were made through AT&T's website, an FCC official said. The data breaches included customer names, partial or full Social Security numbers and some call history and other account information, the FCC said. Unlocking a phone allows it to be used on a new mobile network.

The enforcement action shows the FCC will use its authority against companies that "fail to safeguard" the personal information of customers, FCC Chairman Tom Wheeler said in a statement. The FCC "cannot -- and will not -- stand idly by when a carrier's lax data security practices expose the personal information of hundreds of thousands of the most vulnerable Americans to identity theft and fraud," he added.

The data breaches at the three call centers, operated by contract vendors of AT&T, lasted for months, with sales of customer records at the Mexico call center running from November 2013 to April 2014, the FCC said. The data breach at the Mexico call center affected about 68,000 AT&T customers and the breaches in Colombia and the Philippines affected about 211,000 customers, the agency said.

The data breach in Mexico involved three call center employees, while 40 employees from the Colombia and Philippines call centers were involved, the FCC said.

AT&T has terminated some call center vendor contracts due to the breaches, and it has strengthened some internal data protection processes, the company said. AT&T has "no reason to believe" that the stolen customer records were used for identity theft or financial fraud, the company said in a statement.

"Protecting customer privacy is critical to us," AT&T added. "We hold ourselves and our vendors to a high standard.  Unfortunately, a few of our vendors did not meet that standard."

AT&T will notify all affected customers, will pay for credit monitoring in many cases, and hire a data security compliance manager as part of the settlement with the FCC.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.

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