Feds Finally Realize That AT&T Has Been Enabling Scammers To Abuse IP Fraud... Financed By Taxpayers
from the took-'em-long-enough dept
We first wrote about IP Relay fraud all the way back in 2004, when it was pointed out that a huge percentage of calls using this system were fraudulent, and the telcos were doing nothing to stop it, because they were profiting at the taxpayer's expense. If you're unfamiliar with the system, IP Relay has a good intention: to help hearing impaired people communicate -- allowing them to send text-based messages to phone numbers, which are then read by operators. In order to fund this service, the FCC pays telcos an astounding $1.50 per minute on such calls. Scammers, however, quickly realized that this was a way to make free, almost totally anonymous, calls. And the telcos had every incentive to encourage any usage, scammy or not, since it meant they got paid (from taxpayers).The fact that all of this was obvious eight years ago but it was only just now that feds decided to sue AT&T for abusing the system is pretty incredible. To be fair, the FCC passed rules in 2008 that required telcos try to register users to verify who they were (to take away some of the anonymity of the system). The key issue with this lawsuit is the claim that AT&T intentionally implemented an authentication system that wouldn't work. In other words, it purposely scammed taxpayers out of a ton of money:
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.As Karl Bode at Broadband Reports notes, if you start doing the math, the claim that this is about "millions of dollars" may be a "severe under-estimate." We're talking about 95% of all of these calls, done for many years, being fraudulent, with AT&T having no incentive to cut them out, and scammers having tremendous incentive to use the service as well. Again, all of this done with taxpayers footing the bill. While AT&T definitely deserves scorn for allegedly purposely choosing to set up a bogus registration system, a ton of blame has to go to the government for letting all of this happen for so damn long, and not recognizing just how much AT&T was fleecing taxpayers for under the system (not to mention all of the scams this probably helped enable).
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Filed Under: hearing impaired, ip relay, scam, scammers, taxpayers
Companies: at&t
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All of these things are already done, there is already software to do it ... and AT&T has it all at their disposal.
If they're getting paid $1.50 a minute - that's $90 an hour - likely 70-80% profit on that activity ... well, guess what?
Yeah. You guessed it.
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I've never received a single legitimate relay call.
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Re: Re: TrollHard 2: Virgin Lust
AT&T was acting in good faith, taking people words when they claimed they were calling from the US. Now, despite their putting in place a verification system--like the FCC mandated--they're still on the hook for billions of dollars? Why isn't the FCC suing the inept developers who made AT&T's verification system?!?
Here we're seeing an innocent monopolist hounded for obscene amounts of money due to simple corporate ineptitude.
Imagine if we did this to every big corporation with slipshod QA!!! We wouldn't have any big businesses left--and that would be tragic, since there's no innovation and no small businesses starting up in the US anymore.
Next time, you think hard before indemnifying big corporations--because they're the future.
(and scene! ... hold for applause)
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Re: Re: Re: TrollHard 2: Virgin Lust
Back in the days of Ma Bell - you were only allowed to connect certain telephones to your lines, because only their phones are approved to connect to Ma Bell's lines.
These telephones were rotary dial phones - over a hundred bucks a piece - crazy priced. Want ones with buttons, omg, buttons are high-tech. Two hundred bucks.
What's this - 30 years ago? Yeah. You needed to -rent- the phone for $5 a month.
Then Ma Bell was smashed apart.
We got modems.
We got BBSes.
We got Fidonet.
We got AOL & Prodigy.
We got Internet.
Where are we today?
Where would we be if Ma Bell weren't shattered?
AT&T is not innovation. AT&T is a totalitarian monopoly trying to rebuild itself. Nothing good comes out of massive corporations. NOTHING. They care about one thing - profits.
SMB does all the real innovation - and megacorps suck them dry, or buy them up so there is no true competition in our market.
Open your eyes bud.
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Please go have it re-calibrated.
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I do that when my brain's off. XD
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That is usually a clear sign.
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Re: Re: Re: TrollHard 2: Virgin Lust
Sorry, the tags kinda showed through there.
I am somewhat curious about the fellow who somehow appeared to think this situation demonstrates the need for more "government oversight and regulation". How do you figger that.
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Websites already do this. It's called the client IP address.
Now, here's the $64,000 point that you keep ignoring: A phone number that is using this service can be determined to be legal, or illegal, simply by virtue of where the phone number is located. i.e. the call origination is the *only* bit of info you need. A file being uploaded from an IP address may be illegal, or it may be fair use, or it may be from an authorized source. i.e., the IP address is *not* sufficient info to determine the legality of the upload.
Therefore, Mike's positions are not at all inconsistent.
Any questions? Of course not. You'll probably ignore this post thinking that I'm just one of Mike's cheerleaders.
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There have got to be better alternatives that don't cost taxpayers $1.50 per minute.
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As much as I generally can't stand the AC trolls here, they have a point. Mike does seem to have a bit of a double standard here. Should the service be a "dumb pipe" type of service, or should it be monitored? The laws governing it all force it to be a dumb pipe, so how are they supposed to resolve it? Perhaps the registered phone numbers works, but it sure creates a much larger hurdle for those who actually need it. Then again, handicapped parking tags are difficult to get, too, and for good reason.
This is a bit of a sticky one, and I am not sure what the right thing is here.
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You're either a)trolling b)stupid c)lying or some combination thereof.
AT&T was NOT being asked to "monitor the content of phone calls" which you then bogusly conflate with ISPs monitoring the content of internet browsing. Nothing remotely similar to what you state, but you then rush off, trailing straw, to make a completely invalid point. Not impressive.
AT&T were simply being asked to confirm that the people trying to use the (very profitable) relay-call system were US-based. Easy to do, but when they were ordered by the gov't to do it, they somehow were unable to figure out how to do it. So the revenue stream of tax dollars continued, and this is no more or less than fraud.
Your lecturing, condescending tone is made even more offensive by the fact that you are, as stated, trolling, stupid or lying. An ugly thought process in there regardless, and I'm guessing the rationalization involves a paycheck amirite?
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Compare a corporate international scam operation that steals cash money to a website that has a copywrited photo on it distributing it free to anyone who wants to save it to their desktop (piracy). Why is it ok for powerful rich corporations to steal, but when someone looks at a picture for free they are the criminal? It's perverse.
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They were already monitored, you moron...
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So you are saying that you can't comprehend the basic English statements in what I wrote?
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The gov't asking companies to take down pirated content, or other such stuff is NOT PAYING THEM one red cent to do so. It's a command to spend resources to protect the gov't-created monopolies that profit some OTHER company.
The gov't asking AT&T to validate the calls in this article is a condition of the gov't paying the bill for all such validated calls. It's more like "We are paying YOU do provide a service in a contracted way, please provide it."
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This article proves that we need a smaller government that does not give money to corporations. Screw the disabled, it is their fault they are that way because of their or their parents actions.
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Jebus. WHAT, in this story, suggests MORE of would be better?? AT&T flat out refused to correct a well-intended amendment to the "free relay calls for deafies" giveaway, and they were allowed to do so DESPITE your so-desirable "governmental oversight and regulation" because the political actors involved were paid off with campaign support and donations.
Giving the government more of any power only allows them to sell their services off more. The libertarians you so lamely mock in your post would say, "Do away with the giveaway in the first place." Sure, it's only tens or hundreds of millions of taxpayer dollars wasted (or should I say "unfairly siphoned into the coffers of an existing Big Corp"?), but add up enough similar frauds and waste and you're talking about generations of Americans paying off the debt from your beloved oversight and regulation.
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Frontier Justice is a thing of the past, albeit it was pretty much the corner cutting way to getting rid of a problem (though I should mention it was the best way to get rid of corner cutting).
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/sarcasm
I'd actually LOVE to see AT&T go under. I'm tired of the monopoly they have over the telco system.
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:(
Dark days are here ... darker days ahead.
Anyone clueless about MaBell - remember, this is the internet - brought to life without the "help" of the beast that is Ma Bell. Google "Ma Bell" - read about the nightmare.
"How Ma Bell Shelved the Future for 60 Years"
Magnetic Tape, Fiber optics in the 1930s.... People ACTUALLY THINK that corporations help us?
Don't believe everything that some guy was paid to tell you.
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I had to opt out of all 3rd party text services (not just charged ones), including my school's emergency notification system.
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Why don't we make them all opt-in instead?
The default position should be unless I contact you and say by all means bother me at all hours and take money from me... you can't. Stop lying and telling me its for my convenience, I know your lying because you've never had to fight with your staff to stop these scams your raking money in with.
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Govt Subsidized
I thought having more Public/Private cooperation would bring about progress and savings like with Fannie Mae, Solyndra and Medicare.
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trollicuffs
Not referring to anything that transpired here, the idea just came over me seeing the name trollificus. You never know what will spark inspiration. Long live the free exchange of ideas, information, and debate.
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A T & T benefits from scam
As it turned out, ATT said it was a scam. I did not get the $100 credit, but my contract has been extended for two years. ATT refused to look into why people can access their system and commit fraud to benefit ATT. My contract is now locked for two more years, and they are happy. Of course ATT would refuse to take any action to track the one who committed fraud. They are hoping more people will commit fraud on their behalf so that they can get contracts extended.
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AT&T since 95% of the monies obtained were basically fraud, should have to pay 9500% of the monies gained.
Basically the best way to deal with companies like AT&T and ScumCast is to stamp on them with a spiked boot so hard that fraud becomes simply not worth it any longer.
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