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. ®