The Impact of FCC Suing AT&T in Deaf Relay Services Scam

With news that the FCC is suing AT&T over "deaf calling service fraud," we asked Michael Janger, who wrote "Baby Boomers: The New Disability Market" for us in December, for comment and context. Michael writes:

In the wake of the 2009 arrests of 26 people for Video Relay Services (VRS) fraud and their resulting convictions, the Federal Communications Commission implemented procedures for stronger oversight of its Telecommunication Relay Services program for the deaf and hard-of-hearing.  VRS and IP Relay operators have, in turn, tightened their policies and instituted systems to ensure compliance with FCC directives. 

These directives seem to have failed to reach AT&T. This week, the U.S. Department of Justice filed suit against AT&T for improperly billing the FCC for calls made by Nigerian scam artists on AT&T’s IP-Relay service. The lawsuit charges that AT&T failed to follow a 2008 FCC requirement that relay providers register their users and verify their identities, and that up to 95% of AT&T’s call volume since 2009 was originated by fraudulent foreign callers taking advantage of the free calls. The cost of these improper reimbursements: $16 million.

For two decades, deaf and hard-of-hearing people have benefited from the Federal program for relay services, which enable them to communicate with anyone using a special telephone or videophone, or on their computer. Without these programs, many deaf people would be unable to call their family and friends, or do business over the phone. Even something as mundane as calling the credit card company about a lost credit card would be, at best, an hour-long call.

The Nigerian relay scam is fairly old news, dating back to 2002 when the IP Relay program was launched. Attracted by the prospect of making free calls to unsuspecting American victims, scammers based in Nigeria took advantage of the IP-relay services to target Americans. Until the FCC instituted procedures in 2008 to block these types of calls, it was difficult for IP relay operators such as AT&T to keep Nigerian scammers out of its network, while simultaneously ensuring that legitimate calls from deaf consumers go through.

The FCC, since 2008, has required telecommunication providers to register its relay program users and confirm their identities. According to this week’s lawsuit, AT&T set up a registration system that “did not verify whether the user was located within the United States.”

AT&T’s public response to the lawsuit is notable for the way it preferred to focus on legal issues than on the benefit its program supposedly affords its deaf and hard-of-hearing users:

AT&T has followed the FCC's rules for providing IP Relay services for disabled customers and for seeking reimbursement for those services. . . . 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, but FCC rules require that we complete all calls by customers who identify themselves as disabled.

Many VRS and IP Relay companies have followed the FCC directives by investing in procedures and systems to prevent the kind of fraud that Viable was charged with in 2009, and which AT&T is apparently being sued for this week. To a large degree, these investments are geared toward winning the hearts and minds of deaf consumers, who want the comfort of knowing they are able to make a phone call anytime, anywhere. When resources are being diverted away from deaf consumers toward servicing others who are not deaf, or who do not identify themselves as deaf, in the name of collecting more revenue, it undermines trust in the system. And when the money collected is from the Federal Government, repercussions inevitably follow.

By doing lip service to FCC regulations, as AT&T press release implied, rather than going beyond and ensuring that deaf consumers are satisfied with their phone calls, as most other relay service providers are doing, AT&T risks significant damage to its brand.