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FCC complaint claims AT&T is overcharging for calls to collect user location data

Exclusive US operator accused of abusing loophole in Hemisphere scheme
Tue Feb 18 2014, 09:15
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UNITED STATES TELECOM AT&T has been accused of fraud in a recent filing with the Federal Communications Commission (FCC), alleging that the company overcharges its customers for calls in order to gather their location data.

The complaint was submitted by William Fogal, who alerted The INQUIRER to the report. It alleges that the US telecoms company overcharges its customers when they make calls on its Go-Phone prepaid offering, thanks to an alleged loophole in its data collecting Hemisphere scheme.

The Hemisphere scheme, uncovered by the New York Times in September, is "a partnership between federal and local drug officials and AT&T, that involves an extremely close association between the government and the telecommunications giant", which allegedly has so far seen the telecoms operator collect information including location data from every call made through its network in the past 26 years.

Fogal got in touch with The INQUIRER to alert us to the fact that, given an alleged loophole in this scheme, AT&T is overcharging customers for calls made through its network. This is because the operator reportedly extends each call by 10 seconds after the user has ended the call in order to collect location data, and charges for the time accordingly.

The FCC filing reads, "In an article published by the NY Times, an NSA DEA [programme] 'Hemisphere' had shown that AT&T had participated in this [programme] to gather 'Location' and 'Call Information' data under these [programmes]. I believe that AT&T had discovered a 'loophole' within this [programme] to cause the 7.1 million Go-Phone customers to be 'Overcharged' on calls placed over the AT&T Network.

"All calls placed by customers on the AT&T Go-Phone Network, 7.1 million users, would incur this extra charge on just about every call, resulting in millions of dollars in overcharges per day."

This isn't the first time that such a complaint has been filed with the FCC, with Fogal telling us that one was filed and ignored in January 2013. Complaints were also filed with the FTC and SEC alleging that this extra revenue was not included on AT&T's quarterly financial reports. However, to date these complaints have not been investigated.

This raises questions as to whether the US government influenced and perhaps suppressed an investigation into the alleged fraud for fear of uncovering more about the Hemisphere scheme.

However, the FCC has responded to this latest complaint and said that it will investigate. The filing has been placed in association with AT&T's planned takeover of Leap Wireless, with the complaint alleging that if the acquisition were to take place, more customers likely would be affected.

AT&T has yet to respond to our request for comment, but has pointed us to a page on its website that explains how users are billed using the Go-Phone service.

That reads, "A billable minute begins when you press the Call or Send key on your device. The call connects to the AT&T network and ends when the call disconnects from the AT&T network. Calls are charged in full minute increments and are rounded to the next full minute. You are charged for unanswered calls over 30 seconds."

However, as pointed out by Fogal, this information can only be found on the AT&T website, with no information provided when a customer signs up to the network, or bundled with the handset they have purchased.

It does seem the operator attempted to contact Fogal back in August [PDF] regarding his concerns. However, Fogal tells us that the firm has never been in touch regarding the FCC filing or in relation to its apparent overcharging of customers' phone calls. 

We are awaiting further information from AT&T. µ


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