Patrice Riemens on Sat, 24 Mar 2012 18:28:42 +0100 (CET) |
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<nettime> The wonderful life of corporate capitalism, part 3198 ... (WSJ, where else?) |
Original to: http://online.wsj.com/article/SB10001424052702304636404577297454154404874.html ExecSum: 95% of phone calls billed under the heavilly govt subsidized service for hearing impaired scheme were actually made by Nigerian '419' con-tricksters, 'possibly' with the knowledge of AT&T ... AT&T Tied to Nigerian Scam By ANTON TROIANOVSKI and BRENT KENDALL On April 6, 2010, an AT&T Inc. T -0.60% manager pondered a drop in volume in the company's government-subsidized service for hearing-impaired callers. Reassuring a colleague in an email, the manager said she was "not ready to throw up flags" because "it was Easter Monday yesterday, which is celebrated in Nigeria." The exchange was part of a lawsuit unveiled Thursday by the Department of Justice, which alleged that AT&T knew the service had become a haven for Nigerian scam artists, while serving relatively few of America's hearing-impaired. A Justice Department lawsuit alleges AT&T improperly sought FCC reimbursement for hearing-impaired services it provided to scammers from Nigeria, Anton Troianovski reports on the News Hub. The telecom giant then billed the Federal Communications Commission $16 million for such services since December 2009, as much as 95% of which were provided to international callers attempting to defraud U.S. merchants, the Justice Department said in the suit. The suit was brought under the federal False Claims Act and was based on tips from an employee in an AT&T call center. AT&T did not comment on the suit, but said it followed the FCC's rules for providing the service and seeking reimbursement. The program at issue is a little-known text-based communications service called IP Relay that allows the hearing-impaired to place telephone calls by typing messages over the Internet. Those messages are then read aloud to parties on the other end of the line by call-center employees at companies like AT&T, which are then reimbursed by the FCC. The government alleges that scammers operating out of Nigeria used the service to defraud U.S. merchants by ordering goods with stolen credit cards and counterfeit checks. In essence, the government alleges, AT&T's operators became mouthpieces for the scam artists. The complaint used an example of a scammer pretending to be a foreign buyer, who placed a large order with a stolen credit card. Typing text read aloud by the operator, the scammer would then ask the merchant to wire money for transporting the goods. Enlarge Image 0126attearns 0126attearns Michael Nagle/Getty Images A Justice Department lawsuit alleges AT&T improperly sought FCC reimbursement for hearing-impaired services it provided to scammers from Nigeria. The advantage of using the IP Relay system is that it is anonymous, the Justice Department said in the complaint. The caller can't be visually identified, and FCC rules say operators can't disclose the contents of the conversation. "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," AT&T spokesman Marty Richter said, "but FCC rules require that we complete all calls by customers who identify themselves as disabled." IP Relay services are paid out of fees collected from telecom customers and are included in the federal budget. Providers like AT&T bill the government at a rate of about $1.30 a minute, the complaint says. David Rolka, a telecom consultant who last summer began administering IP Relay funds for the FCC, said he has grown concerned about fraud. Earlier this year, he started requiring providers of IP Relay service to submit detailed records about each call that they handle. This month Mr. Rolka said he has decided to withhold IP Relay payments from the fund to all of the service providers?AT&T, Sprint Nextel Corp., and several smaller, specialized companies. The FCC solicited comment in recent weeks on potential misuse of the IP Relay service. In a filing, Sprint detailed steps it was taking to combat fraud, such as blocking users making an unusually high volume of calls and maintaining a database of Internet addresses used to make international calls. The Justice Department's complaint was filed in a lawsuit originally brought by Constance Lyttle, a former worker in one of AT&T's IP Relay call centers. Filed in a Pennsylvania federal court, it seeks triple damages, restitution and civil penalties. AT&T began providing the service in 2003, and learned from its call center workers the same year that many of the callers were using the service to defraud U.S. merchants, the complaint says. An internal analysis by AT&T in 2004 found some of the worst abusers generated over 10,000 minutes per day of usage, according to the complaint. The study found that on Jan. 14 and 15, 2004, 10 of the top 12 users of the service at AT&T were calling from outside the U.S., primarily from Lagos, Nigeria, according to the complaint. A single Internet address was the source of 100 hours of calls in those two days, placing multiple calls at the same time, according to the complaint. The FCC, concerned about abuses of the system, began requiring telecommunications providers in late 2008 to register users of the service and verify the customers' information. The Justice Department lawsuit alleges AT&T was concerned about losing call volume and implemented procedures that it knew wouldn't weed out fraud. For example, the Justice Department says, AT&T in 2009 followed up on the FCC's new requirements by sending a postcard with a verification code to IP Relay users' purported addresses. AT&T managers recognized that the new system would drastically reduce the volume of fraudulent calls, according to exchanges quoted in the complaint. "We are expecting a serious decline in [Internet relay] traffic because fraud will go to zero (at least temporarily) and we haven't registered nearly enough customers to pick up the slack," one manager of the relay technical team said, according to the complaint, which doesn't specify how the manager's message was delivered. In response to the concerns, the Justice Department says, AT&T switched to a less demanding registration process that simply involved asking users to provide their mailing address. If the address matched a real U.S. address, the users were registered, the complaint says. The number of registered users soared after the switch, the Justice Department alleged. An email from an AT&T employee quoted in the complaint says 2010 was a "great year" for the IP Relay service, with the total of 10 million minutes of service in the year "a whopping +42%" over 2009 volumes. "AT&T has followed the FCC's rules for providing IP Relay services for disabled customers and for seeking reimbursement for those services," Mr. Richter, the AT&T spokesman, said. Write to Anton Troianovski at anton.troianovski@wsj.com and Brent Kendall at brent.kendall@dowjones.com A version of this article appeared Mar. 23, 2012, on page B1 in some U.S. editions of The Wall Street Journal, with the headline: AT&T Tied to Nigerian Scam. # distributed via <nettime>: no commercial use without permission # <nettime> is a moderated mailing list for net criticism, # collaborative text filtering and cultural politics of the nets # more info: http://mx.kein.org/mailman/listinfo/nettime-l # archive: http://www.nettime.org contact: nettime@kein.org