Thursday, March 22, 2012
The Justice Department is seeking to recover millions of dollars from AT&T Corp., alleging the company improperly billed the government for services that are designed for use by the deaf and hard-of-hearing who place calls by typing messages over the Internet.
The system has been abused by callers overseas who use it to defraud U.S. merchants by ordering goods with stolen credit cards and counterfeit checks. In response, the federal government ordered telecom companies to register their users.
The Justice Department lawsuit says AT&T failed to adopt procedures to detect or prevent fraudulent users from registering. The government says the company feared its call volumes would drop once fraudulent users were prevented from calling on the system. The government reimbursed AT&T $1.30 per minute for every call on this system.