AT&T Charged US Taxpayers $16 Million For Nigerian Fraud Calls

McGruber writes "Bloomberg News is reporting that AT&T got more than $16 million from the U.S. government to run Telecommunications Relay Services, intended to help the hearing- and speech-impaired. However, as many as '95 percent of the calls in AT&T's hearing- impaired program were made by people outside the U.S. attempting to defraud merchants through the use of stolen credit cards, counterfeit checks and money orders.' According to the DoJ, 'AT&T in 2004, after getting complaints from merchants, determined the Internet Protocol addresses of 10 of the top 12 users of the service were abroad, primarily in Lagos, Nigeria.' The DOJ intervened in the whistle-blower lawsuit Lyttle v. AT&T Communications of Pennsylvania, 10-01376, U.S. District Court, Western District of Pennsylvania (Pittsburgh). The DOJ is seeking triple damages from AT&T."

Comments

Re:FYI

[Anonymous Coward]

Treble damages is a legal term meaning triple damages.

Yes, lawyers make up their own words/phrases for stuff to confuse you.

Re:FYI

[Richard_at_work]

Lawyers didn't make it up, it's a well used word here in the UK. It's just fallen out of use in US English.

Let me guess....

[Brannoncyll]

.. the only ones getting hurt by the fines will AT&T's customers when they see their bills increase.

Re:Let me guess....

[cpu6502]

Never mind. It appears AT&T didn't obey the rules:

"In late 2008, the FCC required that providers certify that callers are eligible for the program by verifying the userâ(TM)s name and mailing address before issuing a 10-digit telephone number, according to the lawsuit. AT&T implemented a plan that mailed postcards to the addresses of users. Those who returned the card received a 10- digit number.

"Between April 2009 and September 2009, AT&T had registered just 20 percent of its existing users. AT&T managers were concerned they would fall short of company projections for program minutes and related revenue, according to the lawsuit. "We are expecting a serious decline in [internet relay] traffic because fraud will go to zero (at least temporarily) and we havenâ(TM)t registered nearly enough customers to pick up the slack," Burt Bossi, a manager of AT&Tâ(TM)s technical team.

Sounds like deliberate fraud to me.
But then that is standard practive for
government & government-paid contractors. :-|

"The case is Lyttle v. AT&T Communications of Pennsylvania." Who is Lyttle and why is is being prosecuted in Pittsburgh?

Re:Let me guess....

[Anubis IV]

The first name in a case is the person or entity bringing the case, so in this case it's Lyttle bringing a case against AT&T. As for who Lyttle is, from one of the articles:

The United States’ complaint was filed in a lawsuit originally brought under the qui tam, or whistleblower, provisions of the False Claims Act by Constance Lyttle, a former CA who worked in one of AT&T’s IP Relay call centers. Under the act’s qui tam provisions, a private citizen, known as a “relator,” can sue for fraud on behalf of the United States, which has the option of taking over the case.

I.e. Lyttle is the person who noticed the fraud and decided to play whistleblower by suing AT&T. The DOJ has now chosen to step in. The article goes on to mention that if the DOJ is successful in the suit, Lyttle will get a cut of the recovery.

I was getting these calls in 2002

[rickb928]

Back then, it was the Sprint relay service. Callers would want to buy a dozen flat panel monitors, and offer a credit card and U.S. shipping address. Card was usually bogus, but sometimes not. We accepted a few orders but when the card would not approve we just dumped them - and callers would call back to order huge quantities of more expensive gear. We actually started refusing these calls from Sprint outright, got threatened with an ADA suit, and then magically they all stopped. I wonder if Sprint figured it out, or if the clan just moved on. Our defense against the ADA complaint was that we did not do business with foreign customers, no matter the shipping address. Part of this scam was to delay the shipments, dispute the charges, get refunded, and the merchandise is gone. Card goes bad, no one to complain to, and merchants usually have no recourse with the issuer or banks. You're just out the money AND the merchandise. We didn't happen to lose a dollar, but they probably managed to nick someone.

Nice work though, AT&T being the disinterested third party for profit.

Now can we start looking into how the Universal Service Find is being hijacked to try and build the rural Internet where no provider seems willing to do so as in some cases legally required? Noooo... but crony capitalism is flourishing, thanks to the few remaining taxpayers.

Feh.

Re:friendly heads up RE "hearing impaired"

[CubicleZombie]

"Hearing impaired" is not the preferred phrase

Yeah, it should be HEARING IMPAIRED!!!!!

Cost to merchants high as well

[beernutmark]

We get a ton of these calls at our restaurant. It costs us time taken away from actual customers on the fear that we might actually get a real relay call someday. However, I can pretty much guarantee that it will never happen. The caller always asks for 50+ of the exact same item (never on our menu but generic enough to be on most restaurants menu). I wish we could class action sue AT&T for our business costs dealing with these fraudulent calls. FYI, we have found that the best way to shorten up the call is to ask how the weather is in Nigeria. Pretty much guarantees a disconnect.

Re:Consumers will foot the bil for AT&T

[msobkow]

The bosses should get punishment.

Exactly. You can't put a corporation in jail, but you can put the law-breaking decision makers there.

Incorporation protects the board of directors and management from financial losses and seizure of their personal assets. It does not protect them from prosecution for illegal activities or decisions made on behalf of the company.