US mobile operator AT&T has found itself the subject of a lawsuit filed by the United States over government claims that it improperly billed the Federal Communications Commission (FCC) over its provision of Internet Protocol (IP) Relay services, the Justice Department announced today.

The United States believes that AT&T violated the False Claims Act by invoicing and seeking for payment for IP Relay calls by international callers that sought to use it for “fraudulent purposes.”

If you’re wondering what IP Relay calls are, the DOJ explains all:

IP Relay is a text-based communications service designed to allow hearing-impaired individuals to place telephone calls to hearing persons by typing messages over the Internet that are relayed by communications assistants (CAs) employed by an IP Relay provider.

IP Relay is funded by fees assessed by telecommunications providers to telephone customers, and is provided at no cost to IP Relay users.  The FCC, through the TRS Fund, reimburses IP Relay providers at a rate of approximately $1.30 per minute.   In an effort to reduce the abuse of IP Relay by foreign scammers using the system to defraud American merchants with stolen credit cards and by other means, the FCC in 2009 required providers to verify the accuracy of each registered user’s name and mailing address.

The complaint states that AT&T adopted a registration system that did not verify whether a user was located in the US. It is also accused of continuing to utilise the system despite having complete knowledge that it would be used by fraudulent overseas callers.

AT&T is said to have allowed thousands of calls to be established in Nigeria and other countries, with callers seeking defraud companies in the US. This is said to have accounted for nearly 95% of AT&T’s call volume.

AT&T is then said to have billed for reimbursement of these calls and received millions of dollars in federal payments as a result.

“Federal funding for Telecommunications Relay Services is intended to help the hearing- and speech-impaired in the United States,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice.   “We will pursue those who seek to gain by knowingly allowing others to abuse this program.”

AT&T has issued a statement, suggesting that people have misused its IP Relay services and that according to FCC rules it has to complete all calls by customers that identify themselves as disabled:

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 e-mail account, but FCC rules require that we complete all calls by customers who identify themselves as disabled.