Feds Accuse AT&T of Using Nigerian Scammers for Profit

The Justice Department is accusing AT&T of skimming a little off the top every time a Nigerian scammer uses a phone service designed for deaf people called IP Relay. Which is a lot. The practice apparently netted AT&T as much as $16 million.

Nigerian scam artists use IP Relay—the service that reads text-based messages back to the recipient—as an uninflected mouthpiece to use stolen credit card numbers or run other cons.

AT&T's part in this has to do with the $1.30 per minute the FCC reimburses telephone providers for dealing with IP Relay calls. But that's intended for for callers with actual hearing disabilities from within the United States. Obviously, that was hard to track. So in 2008, the FCC made phone companies verify names and addresses. And according to the lawsuit the Justice Department brought against AT&T, 95 percent of AT&T's IP Relay calls after 2009 were from international sources.

The FCC claims that AT&T's "deficient" registration system also played a part in the fraudulent activity of the calls themselves, but that seems to hold less water. FCC regulations require companies to complete all calls from users who report that they are disabled, so all a scammer would have to do is claim impairment. AT&T also denies any wrongdoing in the reimbursement program, so we'll see how that shakes out, but the big blue Death Star hasn't had the strongest record against the feds lately. [The Hill via Techmeme]