Feeds

AT&T profiting from Nigerian scammers, DoJ charges

Lawsuit alleges abuse costing taxpayers 'millions'

Business security measures using SSL

AT&T can't catch a break from the US government. First the feds squashed Big Phone's proposed merger with Deutsche Telekom's T-Mobile USA, and now the Department of Justice has slapped a suit on the company for alleged improper billing for services intended for use by the deaf and hard of hearing.

The service in question is IP Relay, a common form of what known in the trade as a text-based telecommunications relay service (TRS) that allows a hearing-disabled user to type their calls over the internet rather than use audio-based telephony.

It seems that ne'er-do-wells have been fraudulently using IP Relay to defraud US retail outfits by using the service to purcase goods with stolen credit cards.

The catch – and the reason for the suit – is that AT&T is paid about $1.30 for each minute of all IP Relay calls it hosts, and the US government, which subsidizes the service, has paid the company handsomely for IP Relay calls that the DoJ says AT&T should have known were fradulent. How handsomely? The DoJ says that such payments to AT&T have added up to "millions of dollars."

In 2009, the Federal Communications Commission, aware that IP Relay fraud was rampant, began a program in which service providers such as AT&T were required to register users of the service, in an effort to cut down on illegal use of the system by foreign scammers, many of whom were located in – wait for it – Nigeria.

When announcing Thursday's court filing, the DoJ said, "The United States alleges that AT&T violated the False Claims Act by facilitating and seeking federal payment for IP Relay calls by international callers who were ineligible for the service and sought to use it for fraudulent purposes."

The False Claims Act was initiated as a way for whistleblowers within a company to call foul on their employers when they suspected that fraud was being committed in government contracts. In this case, said whistleblower was one Constance Lyttle, who worked in one of AT&T's IP Relay call centers.

According to the DoJ, AT&T "knowingly adopted a non-compliant registration system that did not verify whether the user was located within the United States," and continued the practice even after it had determined that 95 per cent of its IP Relay calls were coming from foreign fraudsters.

"Taxpayers must not bear the cost of abuses of the Telecommunications Relay system," said US Attorney for the Western District of Pennsylvania David Hickton. "Those who misuse funds intended to benefit the hearing- and speech-impaired must be held accountable."

When contacted by The Reg, AT&T spokesman Marty Richter provided a different point of view. "AT&T has followed the FCC's rules for providing IP Relay services for disabled customers and for seeking reimbursement for those services," he wrote in an email.

"As the FCC is aware, it is always possible for an individual to misuse IP Relay services," Richter told us, "just as someone can misuse the postal system or an email account, but FCC rules require that we complete all calls by customers who identify themselves as disabled."

Whose version of the matter is true? Ah, that's why we have a judicial system, as intricate and tedious as it may sometimes be. ®

Security and trust: The backbone of doing business over the internet

More from The Register

next story
Brit telcos warn Scots that voting Yes could lead to HEFTY bills
BT and Co: Independence vote likely to mean 'increased costs'
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
ISPs' post-net-neutrality world is built on 'bribes' says Tim Berners-Lee
Father of the worldwide web is extremely peeved over pay-per-packet-type plans
New 'Cosmos' browser surfs the net by TXT alone
No data plan? No WiFi? No worries ... except sluggish download speed
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Google+ GOING, GOING ... ? Newbie Gmailers no longer forced into mandatory ID slurp
Mountain View distances itself from lame 'network thingy'
Blockbuster book lays out the first 20 years of the Smartphone Wars
Symbian's David Wood bares all. Not for the faint hearted
Bonking with Apple has POUNDED mobe operators' wallets
... into submission. Weve squeals, ditches payment plans
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.