Feds: AT&T Put Fraud on Government Tab

Service for the deaf was abused by Nigerian scammers
By Kevin Spak,  Newser Staff
Posted Mar 23, 2012 9:51 AM CDT
In this Oct. 19, 2009 file photo, the AT&T logo is seen in a RadioShack store in Gloucester, Mass.   (AP Photo/Lisa Poole, File)

(Newser) – The Justice Department has accused AT&T of bilking the government out of more than $16 million by purposely allowing Nigerian fraudsters to abuse a service intended to help deaf Americans. AT&T says it's just following FCC rules requiring it to offer a free IP Relay service, which allows the deaf to type messages for an operator to read. The government then reimburses AT&T for the calls at $1.30 per minute, Bloomberg explains. But the Justice Department says 95% of the calls AT&T facilitated were from foreign con artists, mainly from Lagos, Nigeria.

In 2008, the FCC required AT&T to verify callers were US residents. At first, AT&T complied by mailing out postcards that needed to be returned. Revenue plummeted, and the company feared it would miss its projections. “We are expecting a serious decline because traffic from fraud will go to zero,” one technical manager told company executives. Soon after, AT&T allowed people to simply enter an address online. Registration soared, and internal emails indicate the company knew it was because of fraud—but did nothing to combat it, the complaint alleges.

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