Indiana attorney general probing privacy breach of ‘Obamaphone’ users

The Indiana attorney general’s office confirmed Monday it is investigating a security breach in which Social Security numbers and other personal information were posted online for roughly 44,000 low-income Americans who applied for a federal program that provides discount Internet and phone service.

The program was nicknamed the “Obamaphone” during the 2012 election, though it actually started long before President Obama took office. Indiana reportedly has the highest number of applicants, roughly 17,400, who were signed up by TerraCom Inc. and the affiliated YourTel America Inc.

Applicants from at least 26 states were exposed to the security breach, according to a report published by Scripps Howard News Service.

In addition to the application forms, 127,000 supporting documents such as scans or photos of food-stamp cards, driver’s licenses, tax records, pay stubs and parole letters also were available online.

Federal law prohibits carriers from keeping applicants’ proof of eligibility.

A TerraCom attorney told Scripps the records were stored by Call Centers India, a contractor that helps determine eligibility.

The phone companies said the records of 343 people were accessed from at least March and were removed April 26, after Scripps said it found information through a “simple” Google search and informed the companies of the breach.

The news service said TerraCom officials declined numerous requests for an interview but that a company spokesman said federal and state officials were notified of the breach.

The Federal Communications Commission, which runs the program, acknowledged it knew of the situation and said a single privacy violation could cost a company as much as $1.5 million.

The FCC program is known as Lifeline and started in the Reagan administration in large part to help low-income residents in emergencies and to help them find and keep jobs.

But the program was hit with fraud and abuse through the end of President Obama’s first term, after cell phones were added and wireless companies, getting reimbursed as much as $34.25 a line per month, were reportedly signing up people who’d never applied or were dead.

As a result, the FCC last year tightened the guidelines, essentially limiting households to either one land or cell phone line and requiring carriers to document applicants’ eligibility, which cut the number of subscribers from a peak of 18.2 million in August 2012 to 13.2 million last month.

The program became known during the final months of the 2012 election cycle as “Obamaphones,” after a woman in Cleveland in a viral YouTube video touted what she called the “Obamaphone.”

“He gave us a phone,” she said.

The program cost $2.2 billion in 2012 and is funded through the $2.73 surcharge on monthly phone bills.