Feds Finally Realize That AT&T Has Been Enabling Scammers To Abuse IP Fraud... Financed By Taxpayers
from the took-'em-long-enough dept
The fact that all of this was obvious eight years ago but it was only just now that feds decided to sue AT&T for abusing the system is pretty incredible. To be fair, the FCC passed rules in 2008 that required telcos try to register users to verify who they were (to take away some of the anonymity of the system). The key issue with this lawsuit is the claim that AT&T intentionally implemented an authentication system that wouldn't work. In other words, it purposely scammed taxpayers out of a ton of money:
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 complaint alleges that, out of fears that fraudulent call volume would drop after the registration deadline, AT&T knowingly adopted a non-compliant registration system that did not verify whether the user was located within the United States. The complaint further contends that AT&T continued to employ this system even with the knowledge that it facilitated use of IP Relay by fraudulent foreign callers, which accounted for up to 95 percent of AT&T’s call volume. The government’s complaint alleges that AT&T improperly billed the TRS Fund for reimbursement of these calls and received millions of dollars in federal payments as a result.As Karl Bode at Broadband Reports notes, if you start doing the math, the claim that this is about "millions of dollars" may be a "severe under-estimate." We're talking about 95% of all of these calls, done for many years, being fraudulent, with AT&T having no incentive to cut them out, and scammers having tremendous incentive to use the service as well. Again, all of this done with taxpayers footing the bill. While AT&T definitely deserves scorn for allegedly purposely choosing to set up a bogus registration system, a ton of blame has to go to the government for letting all of this happen for so damn long, and not recognizing just how much AT&T was fleecing taxpayers for under the system (not to mention all of the scams this probably helped enable).