AT&T Fined For Turning A Blind Eye As Drug Dealers Ripped Off Its Customers
from the telecom-free-for-all dept
While Comcast gets the lion's share of the public's loathing, there's an argument to be made for AT&T actually being a worse company. Think Comcast, but with slower broadband speeds, more dubious executive ethics, and an even greater disdain for its paying customers. In just the last few years AT&T has been: fined $18.6 million for helping rip off programs for the hearing impaired; fined $10.4 million for ripping off a program for low-income families; and fined $105 million for helping "crammers" by intentionally making such bogus charges more difficult to see on customer bills.In every instance AT&T was either busy ripping off customers directly, or turning a blind eye to fraud aimed directly at AT&T customers -- because in most instances AT&T got a cut of the profits.
Fast forward to this week, when the FCC announced it would be fining AT&T another $7.7 million (pdf), this time for actively helping drug dealers rip off paying AT&T customers. According to the full FCC order (pdf), AT&T turned a blind eye to two bogus Cleveland companies, Discount Directory, Inc. (DDI) and Enhanced Telecommunications Services (ETS), which had been billing AT&T phone customers $9 per month for a "directory assistance service" that didn't actually exist. These bogus companies were originally only uncovered during a DEA drug investigation:
"In May 2015, while investigating the Companies’ principals for drug-related crimes and money laundering, the United States Drug Enforcement Administration uncovered that DDI and ETS were sham operations that never provided any directory assistance service to the customers billed by AT&T. The Companies’ principals told law enforcement that they submitted fake service charges for thousands of AT&T customers (mostly small businesses) over a multiyear period."The complaint proceeds to suggest that AT&T was aware of these charges (as with previous cramming settlements), but turned a blind eye because it took a cut of each fraudulent charge:
"Although it bore ultimate responsibility for the charges placed on its customers’ bills, AT&T never required proof from the Companies that they obtained customer authorizations to be billed for their service and the record shows that the Companies never obtained any such customer authorizations. In addition, AT&T ignored a number of red flags that the charges were unauthorized, including thousands of charges submitted by the Companies for nonexistent, disconnected, or otherwise “unbillable” accounts."As per the settlement, AT&T will issue $6,800,000 in refunds to all current and former consumers charged for the sham directory assistance service, and a $950,000 fine to the U.S. Treasury. AT&T's also been forced to cease billing for nearly all third-party products and services for wireline customers (now that few use wireline anyway), adopt policies requiring express informed consumer consent before such charges can be reapplied, and revise its billing systems so that such charges are easier to find.
While these fines are puny and belated, keep in mind that until the last few years regulators did little to nothing whatsoever to hold larger telecom companies accountable for their role in perpetuating that kind of fraud -- making this a step up from the apathy of decades' past. Still, AT&T consistently gets to pay settlements that are likely only a small fraction of the money collected over the years, its lawyers and accountants already busy cooking up the fraudulent efforts we'll surely get to read about in 2022.
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Filed Under: cramming, drug dealers, fcc, fines, service fees
Companies: at&t
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("...you will. And the company that will bring it to you: AT&T.")
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Comcast will surely see this as a challenge. I tremble to think what new punishments will rain down upon Comcast's customer base in their quest to regain the top spot.
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Re: penny pinching
They opened an action against all the Telcos that subscribed to a Colorado Evergreen service, Telcos taking a cut of millions of $.20 additions to phone bills, escalating over time unless the customer complained. I got lied to and kicked out of the Edward Roybal Federal Building a few times, and Marge Buckley went up against a room full of lawyers, got fined by the federal judge and gave up her California bar license cause she has no money.
OhWell.
She's not a lightweight, she had successfully argued lubin v parish 415 u.s 709 in the US Supreme Court.
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...which is why it keeps happening. This is why we need to pass the Crime Does Not Pay Act: Any company found to have profited from illegal business dealings must be fined a minimum of 100% of the gross revenue received from said illegal activity.
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He accepted graciously.
And shortly after, was ordered by the court to pay a share of a major environmental clean-up when a mine tailings dam failed.
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Jail time for executives will get more than fines, but the fines should be much more than the amount taken in...they should have to pay for the government investigation, the gross amount taken, then refund the customers the full amount as well.
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Here's a hidden fee...
That adds an extra $20-40/mo unwanted/unneeded cost for an AT&T DSL line. Even if you choose to use it, you have to pay extra for features that are automatically included on wireless plans, such as callerid, call waiting, voicemail, and long distance. It's criminal and they know it.
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Re: Here's a hidden fee...
Pay me now or pay me later maybe? Sadly it is my only choice other than satellite. *Sigh*
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Re: Re: Here's a hidden fee...
I suppose I didn't push the issue hard enough - maybe they could have provisioned a dry line for me if I got to the right person.
Also, the DSL lines were resold through Sonic.net, and perhaps they are further limited in what they can offer.
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Not 'up', 'back'
This is worse than the apathy from before, because it removes any hesitation companies like AT&T might have had for engaging in such activity.
Before there was always the possibility that they'd get caught and face hefty fines, large enough to actually cost the company money. With fines like this however companies know that even if they are caught the worst they'll face is a slap on the wrist with a fine that might as well be a rounding error on the yearly finical report.
When a companies knows that even if they are caught blatantly screwing over their customers they'll still come out way ahead they no longer have any incentive to do otherwise.
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And let's not forget
Between Comcast and AT&T, I think AT&T is clearly the greater evil.
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Re: And let's not forget
Yep, so don't expect the government to come down too heavy on them. The government will punish AT&T as little as it thinks it can get away with. One hand washes the other and AT&T knows it.
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If I'm wrong on how I'm reading that though that means AT&T broke the law AND knowingly aided drug dealers which I'm pretty sure is 10-25 in prison for everyone involved; not 0.1% gross annual revenue.
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Pink Contracts
https://en.wikipedia.org/wiki/Pink_contract
AT&T again.
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