Tuesday, July 10, 2012

AT&T Sues Small Firm For $1.15 M Over Fraud It Didn't Commit

Here's this week's awful, greedy corporate lawsuit.

In 2009, phone hackers got into the system of a 14-employee company called Todd Tool and Abrasives Systems in Ipswich, Mass and racked up close to $900,000 charges on the firm's phone lines in a few days, according to the Salem (Mass.) News.

In 2009, someone at Todd Tools' phone carrier, Verizon, noticed that Todd Tools' phone usage, which usually amounts to a $700 monthly bill, suddenly went to more than $200,000 in four days.
 AT&T Sued a business for fraud
that it did not perpetrate.

Verizon figured fraud, yanked Todd Tools' ability to make international calls until the hacking was fixed and waived the big bill, as was the decent things to do. End of story, right?

Well, in comes AT&T. Todd Tools owner Michael Smith said he never had a contract with AT&T, but the hackers used some sort of "dial around" that used AT&T's system.

Even though Smith had nothing to do with the fraud, AT&T sued him for $1.15 million, the cost of the hackers' bill plus interest.

According to The Salem News, AT&T said it was entitled to the money because Smith should have had a better, more hack- proof phone system. Also, even though Smith wasn't perpetrating the fraud, AT&T said since their system was used, Smith was on the hook for the cash.

So, AT&T was willing to drive a small company  out of business over a fraud that originated in Somalia. I'm sure AT&T didn't really lose $1 million, but hey, if you can get some extra cash from some poor sucker, why not?  And maybe Smith should have had more hack proof equipment, but shouldn't AT&T have had the same? And if Verizon was able to figure out a fraud was going on and pull the plug, shouldn't AT&T have detected it too?

I'm  sure there's a legal basis for AT&T's lawsuit, but was there an ethical basis as well?

As always in these cases, AT&T  beat a hasty retreat when this situation started making the news. But how many small businesses is AT&T killing in other lawsuits that don't make the news? After all, these phone scams must be a dime a dozen.

But the "nice" people at AT&T said their offer to drop the suit is contingent on Smith dropping his counter suit, according to The Salem News. So, they put the poor guy through the wringer, cost him at least $30,000 in legal bills and almost killed Todd Tools, and Smith is supposed to say it's OK?

I'm glad I don't have AT&T as my phone carrier, but knowing them, they'll probably sue me for $1.15 million for exercising my First Amendment rights to criticize them.

Anything to make a buck, right?

1 comment:

  1. Matt. I'm that little guy. And boy are we learning more and more about this case. In fact, we have learned that AT&T knew about this fraud on day one of the calls, and decided to do nothing about it! You are correct, AT&T put me through three years of hell, and put me and my business on the brink of losing everything. We are continuing our lawsuit under 93a for unfair and deceptive trade practices, and hope to expose AT&T for what they have done to us, as I am sure that we are not alone. Thank you for doing your part in helping the little guy.