Cell service provider AT&T has been fined a record $25 million by the Federal Communications Commission, due to an alleged data breach that exposed the personal information of almost 280,000 subscribers. During the breaches, which occurred in 2013 and 2014, several employees in the company's Mexico, Colombia and Philippines call centers extracted customer data without permission.
According to the FCC, the information that was compromised during the breaches included customers' names, account information and portions of their Social Security numbers. At least two AT&T employees admitted to selling the information to a third party, which used the data to attempt to unlock almost 300,000 phones to be sold illegally in a secondary market.
As a result of the breach, AT&T has agreed to pay a colossal $25 million civil penalty, and has promised to alter its business practices to prevent similar incidents from happening in the future. Part of this agreement will require the cell service company to appoint a senior compliance manager, as well as train employees regularly on its privacy policies.
"The FCC's settlement with AT&T sets another benchmark for data breach enforcement, with several important developments," said Robert Cattanach, partner at law firm Dorsey & Whitney, in a statement.
"It 'ups the ante' for such breaches, with a fine two and a half times the previous largest penalty imposed," said Cattanach.
Cattanach also claims that the incident "calls into question the integrity of call centers outside of the U.S."
"The fact that an initial breach was discovered in Mexico, followed by subsequent discoveries in Columbia and the Philippines, suggests AT&T may have a more serious systemic vulnerability rather than a one-off hack," he continued.
The data breach could have an impact on customer loyalty for AT&T, which is currently the second-largest U.S. carrier with more than 100 million subscribers. However, as Cattanach points out, the FCC's imposing action against the company sets a precedent that could encourage AT&T -- and its rivals -- to beef up internal security all around.