After News Reports Reveal Widespread Fraud by Users of IP Relay Systems for the Deaf, Companies Mull Changes to the System
AT&T, which operates call centers in five states including Maryland, has made no public announcement on the situation, but relay operators confirm that scam-call volumes have dropped. And on April 19, AT&T told a Georgia regulator that it is "blocking IP addresses from foreign countries."
The companies' efforts came after operators, known as communications assistants or CAs, criticized their employers in the news media. IP Relay operators are usually paid between $9 and $15 per hour to give voice to the words that deaf and hearing- or speech-impaired relay users type; the operators also type the words that speaking people say in response so that deaf or hearing-impaired users can read them. Many operators say they spent most of their time facilitating credit-card fraud and attempts by foreign criminals to purchase items with bogus bank checks. Stories detailing the scam problem were published by the Arizona Daily Star and City Paper, which reported that organized criminals, based mostly in Nigeria, had dominated the relay service for more than a year (". Out of Africa," April 14) In October 2003, Augusta, Ga., TV station WRDW broadcast a story about the problem and alerted the Georgia Public Service Commission, which oversees AT&T's relay contract in that state. On Oct. 31, 2003, the Georgia Public Service Commission sent a letter to an AT&T manager seeking answers to charges by a fired IP Relay operator there that scam calls infected the system.
AT&T's response, signed by AT&T account manager Mitchell Levy, came on April 19.
"AT&T is using the sophistication and intelligence of its global network to prevent those IP Relay calls from reaching AT&T relay centers, by blocking IP addresses from foreign countries," Levy wrote. "Blocking has been very successful, and AT&T will continue to use this approach to prevent IP Relay fraud and unauthorized use."
Until early April, company spokespeople publicly equivocated about their firms' ability to block scam callers, sometimes suggesting that technical limitations prevented it, other times saying Federal Communications Commission regulation might not allow it. Relay operators say they noticed very little call blocking before March. A federal fund supported by a tax on all long-distance phone companies pays the relay providers $1.368 per minute to handle relay calls, both legitimate and fraudulent.
Ed Bosson, former chairman of the National Association for State Relay Administration, placed the fraud issue on the Interstate Traditional Relay Service Advisory Council's April 20 meeting in Arlington, Va. Bosson is a member of the council, part of the quasi-public, nonprofit National Exchange Carriers Association, which sets rates and collects the funding for the relay service from the nation's long-distance carriers. At the meeting, Bosson, who is deaf, said he contacted all the relay companies and each told him they had begun blocking fraudulent IP Relay calls.
Coincidentally, IP Relay use for February was about 13 percent less than projected for the first time since the National Exchange Carriers Association began paying for such calls in 2002, according to Maripat Brennan, the association's fund manager.
March minutes were also below projections, Brennen says, but large increases loom. On May 3, NECA sent its cost calculations for fiscal 2005, which begins July 1, to the FCC for comment. The proposed fund size is $289.3 million, a 70 percent increase over this year's cost, which is $170 million. This year's fund was originally projected to be $115 million, but was increased mid-year by $55 million because of a funding shortfall, in large part because of higher than expected IP Relay usage.
Next year, IP Relay costs alone are expected to exceed $117 million, by Brennan's figures. And with the FCC's concurrence, the reimbursement rate will be decreased to $1.349 per minute to better limit relay companies' profits to 11.25 percent, after taxes. "We have companies that claim a 20 percent profit margin," Brennan said at the meeting. "We do not allow 20 percent profit."
Brennan projected IP Relay use to increase at nearly the rate it did before scam blocking. Although spokespeople for the relay companies say that the fraud problem was always much smaller than IP Relay operators depicted it, some operators say that recent changes in other policies have increased billable minutes on IP Relay as if to make up for the decrease in scam calls. For example, Robert Grodevant, a former MCI operator, says in March his company started telling operators to bill the federal fund for the "LEC recording," as when a caller reaches a number that is not in service. Other operators who post on an Internet bulletin board devoted to the subject say longstanding rules allowing them to disconnect prank callers when the call originator and receiver are in the same room have been changed. (Yes, that's right, prank callers over IP Relay often contact a friend or dorm mate standing right next to them, and the two pranksters amuse themselves by seeing how many dirty words they can make the operator say, and for how many hours). This results in longer calls and more billable minutes.
"Yes, that policy has ticked me off greatly," an anonymous relay operator posted recently in response to another operator complaining about the new rules. "But I actually had one [supervisor] tell me that 'we would be hanging up on money if we are hanging up on them' and, 'in other words, we would lose revenue' thanks retard, I got it the first time when you said it like an idiot."
Meanwhile, by April 28 some IP Relay operator said they were seeing increasing scam calls again. One operator working for MCI in California says his Nigerian call volume jumped 400 percent, just as Johnson was bragging about call blocking. This operator, who asked that his name not be used so he doesn't get fired, says his scam quotient increased from two to eight calls a day, and that he discovered that the fraudsters had altered the computer program that controls the look and functionality of MCI's Web-based relay portal.
"They [criminals] edited the program and wrote their own front page," the operator says. "There is no cut-and-paste functionality in the [official] program, and we are getting scripts."
The relay operator says some of the fraud patterns seem to be changing as well: instead of the old standbys, T-shirts, shoes and electronics, "they started ordering weird things--five wedding dresses."
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