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AT&T Sued for $16M Fraud Linked to Deaf Relay Service

AT&T improperly billed the U.S. government for foreign scammers' calls to its IP Relay service for the deaf, a lawsuit claims. Now the feds want their money back -- more than $16 million.

Under a Federal Communications Commission program, AT&T is reimbursed at a rate of $1.30 per minute for calls placed through its Internet protocol relay service, or IP Relay, the Atlanta Journal-Constitution reports. IP Relay allows hearing-impaired users to type messages that are read aloud to a recipient by an AT&T employee.

But since 2009, nearly 95% of AT&T's IP Relay calls were made by foreign nationals -- mostly from Nigeria -- trying to scam U.S. businesses, the Justice Department claims in its AT&T lawsuit.

AT&T knew about the foreign scammers' use of IP Relay but did nothing to stop it, the lawsuit says. As a result, AT&T improperly collected more than $16 million in government reimbursements for fraudulent calls, the suit asserts, according to PC Magazine.

Not only did AT&T improperly bill the FCC, but the company also failed to verify the legitimacy of its IP Relay users as required by FCC rules, the Justice Department alleges.

"Taxpayers must not bear the cost of abuses of the Telecommunications Relay system," a federal prosecutor said in a statement.

But an AT&T spokesman insists his company did not break any laws. "As the FCC is aware, it is always possible for an individual to misuse IP Relay services, just as someone can misuse the postal system or an email account," the spokesman told Ars Technica, "but FCC rules require that we complete all calls by customers who identify themselves as disabled."

The Justice Department's AT&T IP Relay lawsuit was filed in federal court in Pittsburgh, Pa. The suit was inspired by a whistle-blower's complaint at one of AT&T's call centers.

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