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FCC Fines Phone Data Broker

The Federal Communications Commission (FCC) hit an online telephone records broker Thursday with its maximum fine of $97,500 for failing to respond to a subpoena request.

The data the brokers are selling includes numbers dialed, calls received and the location of callers.

The FCC wants to know where the broker, known as LocateCell, obtained the data. The Telecommunications Act of 1996 prohibits phone companies from using or disclosing proprietary customer information without customers' approval.

As part of its investigation into the selling of unauthorized personal records, the FCC sent a subpoena to LocateCell last November. The company is also known as First Data Solutions, of Knoxville, Tenn., and 1st Source Information Specialists, of Tamarac, Fla.

When LocateCell only partially responded to the subpoena, the FCC in January again demanded the company comply with the subpoena. LocateCell has not responded. Internetnews.com was not able to reach LocateCell for comment prior to presstime.

The telephone companies maintain brokers are obtaining the information through a technique known as "pretexting" where an individual uses false pretenses to trick companies into revealing information.

Last month, a First Data Solutions official took the Fifth Amendment in response to the same type of questions from the House Energy and Commerce Committee.

"We expect that subpoenas, as well as all of our requests for information, will be responded to completely and promptly," FCC Commissioner Kevin Martin said. "The ability of data brokers, such as LocateCell, to engage in the trafficking of these records is a practice that must be stopped."

In March, the Energy and Commerce Committee approved on a 41-0 vote the Prevention of Fraudulent Access to Phone Records Act.

The legislation authorizes the Federal Trade Commission and the FCC to shut down data broker sites selling non-public information.

The legislation is awaiting a full House vote. Similar bills are pending in the Senate.

"The Commission remains committed to ensuring that consumers' personal phone data is kept confidential. Our investigation is ongoing," Martin said.

"In addition to this investigation, we intend to complete the proceeding we began several months ago that seeks to strengthen the safeguards currently in place to protect customer phone records."

FCC Commissioner Michael Copps said it was time for the FCC to take action against the telephone records brokers, noting the agency has often treated privacy as a backburner issue.

"This is an unsettling and entirely intolerable state of affairs. The Commission simply cannot stop until the root problem has been solved," Copps said. "This company's failure to respond to our subpoena about how it came to possess private data underscores just how badly further action is needed."

In addition to being the target of House and FCC investigations, 1st Source Information Specialists and Data Find Solutions were sued last year by Sprint Nextel.

Alhtough LocateCell.com appears to be out of business, a simple Google search reveals a number of sites still selling confidential phone records.

"The Commission's challenge is to catch up with the American people who are demonstrably tired of unlawful violations of their digital privacy. They need our help and they need it now," Copps said.