AT&T Pays Another $3.5 Million to Settle IP Relay Fraud Claims
Since 2004 or so
we've been covering the fraudulent abuse of IP Relay services, which are intended to help the hearing impaired communicate with phone users via the Internet. In 2008 the FCC finally passed rules requiring that carriers had to register users and at least try
to verify their addresses as genuine, something carriers tended to resist since the fraud -- mostly Nigerian credit card scams -- has been incredibly profitable for them.
In 2012 AT&T was sued by the Department of Justice
, who claimed the telco was intentionally doing nothing to stop the fraud in order to continue profiting from it. Back in May of this year, AT&T agreed to settle with the DOJ to the tune of $18.25 million
, even though as we noted at the time this probably didn't even begin to cover the money AT&T made off of lax fraud prevention
Today, the Department of Justice announced AT&T would be paying another $3.5 million
to resolve civil allegations under the federal False Claims Act. AT&T tells Bloomberg News the company still denies any wrongdoing, while downplaying the scope of the fraud:
Marty Richter, a spokesman for AT&T, said in an e-mailed message that although the company denies the allegations, it decided the “most productive course” was to settle the suit. Richter said the case involved "an exceptionally small line of business that we no longer offer."
When you consider estimates that 95% of AT&T's IP Relay call volume was fraudulent and AT&T made $1.50 per minute for more than a decade, "exceptionally small" isn't quite the phrase that comes to mind.