DOJ: AT&T Billed U.S. Gov't For Around $15 Million In Fraudulent Calls

The Dept. of Justice has filed a lawsuit against AT&T, alleging that the telecom giant billed the U.S. government for millions of dollars related to phone services intended to be used by hearing-impaired callers.

AT&T provides a service that allows the hearing-impaired to communicate over the phone with hearing individuals by typing in messages that are then relayed by a communications assistant. For providing this service, AT&T is reimbursed around $1.30/minute by the FCC.

In 2009, in order to prevent scammers based in foreign nations from defrauding callers and abusing the system, the FCC required AT&T and other providers of these services to verify the accuracy of registered users’ names and mailing addresses.

But the DOJ lawsuit says 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.”

From the DOJ statement:

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.

It’s estimated that AT&T received about $16 million in reimbursements for relayed calls. If the DOJ’s figure of a 95% fraud rate holds true, that would mean false claims to the tune of more than $15 million.

“Taxpayers must not bear the cost of abuses of the Telecommunications Relay system,” said David J. Hickton, U.S. Attorney for the Western District of Pennsylvania, where the complaint was originally filed by a whistle blower at an AT&T call relay center. “Those who misuse funds intended to benefit the hearing- and speech-impaired must be held accountable.”

Meanwhile, a rep for the Death Star says the company followed FCC guidelines:

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