from the telecom-free-for-all dept
While Comcast gets the lion’s share of the public’s loathing, there’s an argument to be made for AT&T actually being a worse company. Think Comcast, but with slower broadband speeds, more dubious executive ethics, and an even greater disdain for its paying customers. In just the last few years AT&T has been: fined $18.6 million for helping rip off programs for the hearing impaired; fined $10.4 million for ripping off a program for low-income families; and fined $105 million for helping “crammers” by intentionally making such bogus charges more difficult to see on customer bills.
In every instance AT&T was either busy ripping off customers directly, or turning a blind eye to fraud aimed directly at AT&T customers — because in most instances AT&T got a cut of the profits.
Fast forward to this week, when the FCC announced it would be fining AT&T another $7.7 million (pdf), this time for actively helping drug dealers rip off paying AT&T customers. According to the full FCC order (pdf), AT&T turned a blind eye to two bogus Cleveland companies, Discount Directory, Inc. (DDI) and Enhanced Telecommunications Services (ETS), which had been billing AT&T phone customers $9 per month for a “directory assistance service” that didn’t actually exist. These bogus companies were originally only uncovered during a DEA drug investigation:
“In May 2015, while investigating the Companies? principals for drug-related crimes and money laundering, the United States Drug Enforcement Administration uncovered that DDI and ETS were sham operations that never provided any directory assistance service to the customers billed by AT&T. The Companies? principals told law enforcement that they submitted fake service charges for thousands of AT&T customers (mostly small businesses) over a multiyear period.”
The complaint proceeds to suggest that AT&T was aware of these charges (as with previous cramming settlements), but turned a blind eye because it took a cut of each fraudulent charge:
“Although it bore ultimate responsibility for the charges placed on its customers? bills, AT&T never required proof from the Companies that they obtained customer authorizations to be billed for their service and the record shows that the Companies never obtained any such customer authorizations. In addition, AT&T ignored a number of red flags that the charges were unauthorized, including thousands of charges submitted by the Companies for nonexistent, disconnected, or otherwise ?unbillable? accounts.”
As per the settlement, AT&T will issue $6,800,000 in refunds to all current and former consumers charged for the sham directory assistance service, and a $950,000 fine to the U.S. Treasury. AT&T’s also been forced to cease billing for nearly all third-party products and services for wireline customers (now that few use wireline anyway), adopt policies requiring express informed consumer consent before such charges can be reapplied, and revise its billing systems so that such charges are easier to find.
While these fines are puny and belated, keep in mind that until the last few years regulators did little to nothing whatsoever to hold larger telecom companies accountable for their role in perpetuating that kind of fraud — making this a step up from the apathy of decades’ past. Still, AT&T consistently gets to pay settlements that are likely only a small fraction of the money collected over the years, its lawyers and accountants already busy cooking up the fraudulent efforts we’ll surely get to read about in 2022.