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Outcry Over Sale of Cell Phone Calling Records

Congress May Act; FCC and FTC Have Not

By Martin H. Bosworth
ConsumerAffairs.com

January 17, 2006

Calling Records • FTC Shuts Down Pretexting Operation • Phone Pretexters Get Off Cheap • Verizon Wireless Changes Customer Data Policy • FCC Strengthens Rules For Phone Privacy • House Tries Once More to Pass Pretexting Bill • Pretexting Bill: Pretense or Reality? • Hewlett-Packard Pays $14.5 Million to Settle Pretexting Suit • HP Scandal Ignites New Pretexting Battle In Congress • AT&T Sues Calling Record Brokers • Sprint Nextel Settles Case with Florida Data Broker • Feds Sue Calling Record Vendors • Illinois Lawsuit Charges Data Brokerages • Florida Judgment to End Data Broker's Business • Florida Investigates Fake Caller IDs • California Sues Data Trace USA for $10 Million • Missouri Sues Datatraceusa.com • Florida Sues Data Broker Over Sale of Phone Records • Texas Sues Companies Selling Telephone Calling Records • Websites Hawking Phone Records Shut Down • FTC Vows to Stop Illicit Sale of Cell Phone Calling Records • FTC Pledges "Vigorous" Pursuit of Cell Phone Record Sales • AT&T Accused of Eavesdropping, Calling Record Sales • Sprint Sues Cell Phone Record Brokers • Missouri Shuts Down Locatecell.com • Texas Probes Cell Phone Calling Record Sales, Missouri Files Suit • Illinois Sues Company Selling Cell Phone Calling Records • Outcry Over Sale of Cell Phone Calling Records

The news that companies can access any cell phone customers' records and sell them to third parties online has provoked a flurry of criticism and calls for investigation, not to mention legislation restricting the practice.

Cingular Wireless obtained a temporary restraining order on Jan. 13th against two companies believed to be masterminding the sale of cell phone and landline records via the Web, Data Find Solutions Inc. and 1st Source Information Specialists.

Joaquin Carbonell, Cingular's executive vice-president and general counsel, said the company "will not tolerate the theft of customer records."

Cingular spokesman Mark Siegel told ConsumerAffairs.com that the company "will continue to ratchet up its efforts to increase security and protect its customers' privacy."

Sen. Harry Reid (D-NV) called on the Federal Communications Commission to investigate how third party companies are gaining access to individual phone records, while Sen. Charles Schumer plans to introduce legislation that will make any sale of cell phone records for "unlawful" purposes a federal crime.

On The Back Burner

The news that third party companies were selling phone records on Web sites such as Locatecell.com and CellTolls.com should not have come as a revelation.

Congressman Ed Markey (D-MA) sent a letter to FCC chair Kevin Martin and Federal Trade Commission (FTC) chair Deborah Platt Majoras in Nov. 2005, calling on them to investigate the practice and push for greater restrictions.

"The privacy of American citizens is priceless -- the phone records of consumers should not be commodities for sale in any cyberspace bazaar," Markey said.

The Washington Post and Chicago Sun-Times both published stories dealing with the issue, and the Electronic Privacy Information Center (EPIC) filed complaints with the FCC to address the issue and push for greater restrictions on the sale of customer records.

But it wasn't until Washington, D.C.-based blogger John Aravosis bought his own cell phone records, and then the records of former Presidential candidate General Wesley Clark, that the issue finally made a blip on the national radar.

Aravosis ripped into Congress and the major telecommunications companies for not moving fast enough and doing more to protect phone users' privacy.

"What's most infuriating to me is that our government, both Congress and the executive branch, has known about this since at least last July when the Washington Post story ran, and they didn't do a damn thing about it, " Aravosis said.

"This is the kind of issue that you could get fixed on Capitol Hill IN ONE DAY…[But that would take] someone who isn't in the pocket of the telecommunications industry, the telemarketers, and the direct marketing lobbyists."

Inside Job?

The major question on everyone's mind is how enterprises like Data Find Solutions are getting their hands on what should be protected, private information. News reports are focusing on the possibility of rogue employees within telecommunications companies who may be selling the records to third parties.

The truth may be a bit more complex, however.

Although customer service representatives for telco companies are based in the U.S. for the most part, the actual billing transactions and management for major players such as Nextel and T-Mobile are handled by an overseas third-party company.

That company is Amdocs, an Israel-based customer relations management (CRM) company with offices throughout the United States and other countries. Amdocs specializes in customized billing and "risk" applications for its clients, including most of the major telecommunications companies.

Amdocs trumpets its ability to deliver "deep customer understanding" for the needs of the services industry. Amdocs' philosophy revolves around structuring its responses according to its most profitable customers, its promotional material boasts.

And indeed the company has reaped great profit from its work with the major phone companies. In fiscal year 2004, 11 percent of Amdocs' revenue came from partnerships with Bell Canada and SBC Communications (now AT&T), while 15 percent came from Nextel.

Amdocs reported revenue of $573 million for the fourth quarter of 2005, with total 2005 revenue totaling over $2 billion.

Amdocs is undertaking a venture with SBC/AT&T called "Project Lightspeed," handling customer management for AT&T's attempt at delivering Internet-based television and content services. AT&T also owns Cingular Wireless.

When asked about the possibility of Amdocs' involvement in the sale of customer phone records, Mark Siegel would not comment.

"We can't risk getting into specifics for fear of tipping off the bad guys," he said. "We're pursuing a variety of means to improve the situation."

Amdocs has been investigated by the U.S. government before. In 2002, Fox News broadcast a series of reports detailing how Amdocs and other overseas companies might be gathering detailed information on customer phone usage, and not protecting it properly.

According to the report, Amdocs was exploring the possibility of using "widespread data mining techniques" that utilized customer "behavior," such as credit reports, to build profiles of the customers, including who they called and when.

"U.S. intelligence does not believe the Israeli government is involved in a misuse of information, and Amdocs insists that its data is secure," the report said. "What U.S. government officials are worried about, however, is the possibility that Amdocs data could get into the wrong hands, particularly organized crime."

Although there is no evidence indicating Amdocs' involvement in the sale of cell phone records as of yet, as long as major telecom companies continue to outsource vital operations such as customer records to third-party companies, the possibility for misuse and abuse will exist.

Even though the outcry over the sale of cell phone records may provoke some changes and new laws, the danger for any caller will still exist every time they pick up the phone.

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