March 23, 2012 at 1:46 PM ET
The Department of Justice announced a lawsuit against AT&T, charging that the telecom giant looked the other way while Nigerian scam artists exploited its call-assist service for the hearing impaired — and then turned around and billed the FCC for the calls.
IP Relay service, offered by AT&T as well as other carriers, is designed to assist hearing-impaired callers: They type their correspondence, and an operator reads it aloud to the call recipient. The caller doesn't have to pay for this service, but the carrier bills the FCC roughly $1.30 a minute to provide the operator-assisted communication.
Criminals — primarily located in Nigeria, according to the Wall Street Journal — exploited this system to order merchandise from U.S. retailers using stolen credit card numbers.
Since 2009, the FCC has required carriers to verify that these IP Relay connections originate domestically to prevent scam artists overseas from taking advantage of the system. In its complaint, the Justice Department charged that AT&T deliberately put loopholes in its verification process so it could continue taking the calls and earning millions of dollars in payments from the FCC. The DOJ estimates that as much as 95 percent of AT&T's IP Relay revenue came from fraudulent use of the system by foreign criminals.