Jail time for phone record scammers?

A new proposal in the House of Representatives targets companies that sell fraudulently obtained records of phone calls.

Anyone who "fraudulently" acquires and resells records of calls made by a telephone subscriber could face fines of up to $500,000 and prison sentences of up to 20 years, under a bill proposed Wednesday in the U.S. House of Representatives.

Five Republicans and four Democrats from the House Judiciary Committee introduced the measure, which they dubbed the "Law Enforcement and Phone Privacy Protection Act of 2006," on the same day that a Senate subcommittee convened a hearing on the topic.

It's not entirely clear that the LEPPA measure is necessary. The Federal Trade Commission has for decades enjoyed the power to stop "deceptive" business practices, a term that also encompasses fraudulent behavior. In addition, state attorneys general have the ability to file civil and criminal suits to halt illicit business practices.

Congress has taken a particular interest in the topic of phone record privacy after reports that online brokers may be "pretexting"--that is, posing as legitimate customers--to obtain such records and then sell them cheaply on the Web.

Wednesday's proposal appears to call for some of the stiffest penalties of any of the bills introduced so far related to this matter.

According to a summary of the bill's provisions prepared by the Judiciary committee (the full text was not immediately available), politicians are proposing up to $250,000 in fines for individuals convicted of "fraudulently obtaining confidential phone record information of a telephone company," and $500,000 for organizations. Both people and organizations would face up to 20 years in prison.

The monetary penalties would remain the same for those convicted of selling or transferring such records and for those who knowingly purchase them. For both groups, the prison sentences drop to no more than 5 years.

The bill provides scope for all penalties to be increased if the illicit activity was carried out in conjunction with another federal crime, such as domestic abuse.

Other politicians have already requested information from companies suspected of involvement in phone record sales. The Federal Communications Commission has also stepped in, threatening $100,000 fines to two major phone service providers accused of failing to comply with federal standards for safeguarding the privacy of their customer records.

The phone record brokers accused of engaging in such activity also face a spate of lawsuits from wireless providers and from state governments.

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