TerraCom and Yourtel America were ordered, on Thursday, to pay $3.5 million in civil penalties to the Federal Communication Commission (FCC) in a settlement for failing to adequately store the data of more than 300,000 customers.
The sister companies were found to be storing customers' personal data on unprotected severs that were accessible via the internet.
In 2013, an investigative reporter was able to access confidential records and documents submitted by subscribers and applicants to Lifeline, the companies' low-income subsidy program. The information included names, social security numbers, and driver's license information and other sensitive identifiers.
After the reporter submitted his findings to the companies, they reported the journalist's actions to the FCC as a breach and the commission found the data was stored in plain text that was neither encrypted or password protected.