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AT&T happy to profit from fraud, feds allege

'Net Buzz By , Network World
March 26, 2012 12:07 AM ET
McNamara

Network World - The federal government last week issued a remarkable complaint against AT&T: In essence, the Department of Justice alleges that the telecom giant has bilked U.S. customers out of millions of dollars by willfully failing to prevent the rampant abuse of a system designed to help the hearing impaired.

AT&T's response: We can't fix what we can't fix.

The system, called IP Relay, lets people with hearing impairments place calls by typing messages over the Internet. It is funded by telephone customers, who pay fees into a special fund that reimburses carriers at a rate of about $1.30 per minute.

However, the system has been so abused by foreign-based scammers that the FCC in 2009 issued a mandate to carriers that they verify who's using it. The Department of Justice alleges that AT&T has willfully violated that mandate because - get this -- the fraudulent calls are too lucrative to AT&T for AT&T to turn them away.

It's an astonishing allegation. Here's part of the DoJ's press release:

"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."

AT&T issued statement to press outlets that appears to say: What do you want from us?

"As the FCC is aware," the statement reads, "it is always possible for an individual to misuse IP Relay services, just as someone can misuse the postal system or an e-mail account, but FCC rules require that we complete all calls by customers who identify themselves as disabled."

Now, I have no idea as to whether this kind of fraud is something a service provider could stop or not. But it's clear the government believes that AT&T's response to the problem would have been a whole lot different and a whole lot more effective had the company been losing millions instead of gaining millions.

Subhed: Debunking a ridiculous RFID rumor

You'd like to think that some things are simply too ridiculous for Snopes.com to even bother debunking ... but, apparently, you can't always get what you want. This one comes from the Snopes newsletter.

The rumor: That the Patient Protection and Affordable Care Act - also known as "Obamacare" to some of those who oppose it -- requires that everyone be implanted with an RFID microchip by March 23, 2013.

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