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Department of Justice takes AT&T to court over alleged IP Relay fraud

News by Dan Seifert on Thursday March 22, 2012.

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The U.S. Department of Justice has filed a lawsuit against AT&T that claims the carrier improperly billed the government for millions of dollars worth of IP Relay phone calls.

As explained by the DoJ, IP Relay is a "text-based communications service designed to allow hearing-impaired individuals to place telephone calls to hearing persons by typing messages over the Internet that are relayed by communications assistants (CAs) employed by an IP Relay provider." The calls are provided free to the user, though carriers bill the Federal Communications Commission at a rate of $1.30 per minute to cover their costs. As one might expect, the system is prone to malicious foreign users that use it in attempts to defraud American merchants, which prompted the FCC to enact laws in 2009 that required carriers to validate each user's name and mailing address.

The lawsuit against AT&T alleges that the carrier billed the government for IP Relay calls, but that it did not comply with the 2009 user validation law. The carrier sought out payments for IP Relay calls that were made by international users that were ineligible to utilize the service. The DoJ says that AT&T "knowingly adopted a non-compliant registration system that did not verify whether the user was located within the United States." The suit claims that AT&T continued to utilize this system even after it was aware that it could be abused by fraudulent users. The government says that up to 95 percent of AT&T's billings were due to calls made by ineligible users.

As a result of AT&T's alleged improper billing, the FCC was charged millions of dollars for IP Relay calls that the government claims were not legitimate.

"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. "Those who misuse funds intended to benefit the hearing- and speech-impaired must be held accountable."

The violations were brought to the government's attention by a whistle blower who worked in AT&T's IP Relay call centers. [U.S. Department of Justice via The Next Web]

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Dan Seifert
Dan is MobileBurn.com's Editor-in-Chief. Based in Poughkeepsie in New York, Dan can be found on Twitter as @DCSeifert.

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