AT&T Charged US Taxpayers $16 Million For Nigerian Fraud Calls 155
McGruber writes "Bloomberg News is reporting that AT&T got more than $16 million from the U.S. government to run Telecommunications Relay Services, intended to help the hearing- and speech-impaired. However, as many as '95 percent of the calls in AT&T's hearing- impaired program were made by people outside the U.S. attempting to defraud merchants through the use of stolen credit cards, counterfeit checks and money orders.' According to the DoJ, 'AT&T in 2004, after getting complaints from merchants, determined the Internet Protocol addresses of 10 of the top 12 users of the service were abroad, primarily in Lagos, Nigeria.' The DOJ intervened in the whistle-blower lawsuit Lyttle v. AT&T Communications of Pennsylvania, 10-01376, U.S. District Court, Western District of Pennsylvania (Pittsburgh). The DOJ is seeking triple damages from AT&T."
FYI (Score:3)
It's treble, not triple.
Re:FYI (Score:5, Informative)
Treble damages is a legal term meaning triple damages.
Yes, lawyers make up their own words/phrases for stuff to confuse you.
Re:FYI (Score:5, Informative)
Lawyers didn't make it up, it's a well used word here in the UK. It's just fallen out of use in US English.
No it hasn't... (Score:4, Funny)
"Some voices got treble, some voices got bass
We've got the kind of voices that are in your face!"
-- Beastie Boys
See? Not out of use at all... Oh, wait, we're talking about treble/triple though aren't we?
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Lawyers didn't make it up, it's a well used word here in the UK. It's just fallen out of use in US English.
No, but they do everything they can (such as use archaic words like treble) to confuse the people and prevent them from understanding laws and court proceedings without hiring one of them.
There ought to be a law.... oh wait.
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Re:FYI (Score:5, Informative)
As any fisherman knows, a treble hook is a three-pronged hook.
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No, Treble is an archaic form of the word 'triple' that the legal system has hung on to. It is perfectly normal (if old-fashioned) English.
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Yes, it was made up by RIAA lawyers so that later they can twist the meaning and charge separate bass and mid-range damages.
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they see me trollin
they hatin
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Let me guess.... (Score:5, Insightful)
Re:Let me guess.... (Score:4, Insightful)
Don't be an ATT customer.
I can't help wondering if this is really AT&T's fault? They were tasked to provide this service by the government. Were they then supposed to filter-out the overseas hearing-impaired? Doesn't that violate the Common Carrier requirement that phone calls not be monitored for content or restricted? (ponder). I'm curious to see how this turns-out.
Re:Let me guess.... (Score:5, Informative)
Never mind. It appears AT&T didn't obey the rules:
"In late 2008, the FCC required that providers certify that callers are eligible for the program by verifying the userâ(TM)s name and mailing address before issuing a 10-digit telephone number, according to the lawsuit. AT&T implemented a plan that mailed postcards to the addresses of users. Those who returned the card received a 10- digit number.
"Between April 2009 and September 2009, AT&T had registered just 20 percent of its existing users. AT&T managers were concerned they would fall short of company projections for program minutes and related revenue, according to the lawsuit. "We are expecting a serious decline in [internet relay] traffic because fraud will go to zero (at least temporarily) and we havenâ(TM)t registered nearly enough customers to pick up the slack," Burt Bossi, a manager of AT&Tâ(TM)s technical team.
Sounds like deliberate fraud to me. :-|
But then that is standard practive for
government & government-paid contractors.
"The case is Lyttle v. AT&T Communications of Pennsylvania." Who is Lyttle and why is is being prosecuted in Pittsburgh?
Re:Let me guess.... (Score:5, Informative)
The first name in a case is the person or entity bringing the case, so in this case it's Lyttle bringing a case against AT&T. As for who Lyttle is, from one of the articles:
The United States’ complaint was filed in a lawsuit originally brought under the qui tam, or whistleblower, provisions of the False Claims Act by Constance Lyttle, a former CA who worked in one of AT&T’s IP Relay call centers. Under the act’s qui tam provisions, a private citizen, known as a “relator,” can sue for fraud on behalf of the United States, which has the option of taking over the case.
I.e. Lyttle is the person who noticed the fraud and decided to play whistleblower by suing AT&T. The DOJ has now chosen to step in. The article goes on to mention that if the DOJ is successful in the suit, Lyttle will get a cut of the recovery.
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Don't be an ATT customer.
I can't help wondering if this is really AT&T's fault? They were tasked to provide this service by the government. Were they then supposed to filter-out the overseas hearing-impaired? Doesn't that violate the Common Carrier requirement that phone calls not be monitored for content or restricted? (ponder). I'm curious to see how this turns-out.
How can this not be AT&T's fault? They are the ones with the tools to detect and reduce this fraud. If a city pays a company to run a paratransit service, they shouldn't allow it to be used as a getaway car for a bank robbery, even if the passenger appears to be disabled.
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I used to work for a relay service that was a subsidy of Sprint. We had this problem too but there were issues involved that prevented alot of action on our part to stop these fraud calls. Relay's for the most part contracted by the state for a particular area and did not follow the monopoly areas. By contract we were required to be impartial on calls, even though our operators were accustomed to these calls and knew usually within the first 60 seconds if it was fraud or not we could not assume said pe
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omg! don't hold corporations accountable!
get a grip.
Re:Let me guess.... (Score:4, Insightful)
omg! don't hold corporations accountable!
get a grip.
Hold the management responsible. Fining the corporation will just result in pissing off their customers but will not discourage the corporation from doing it again unless they lose a significant number of customers.
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So what do you suggest? Make corporations immune to fines and damages? Yes, their customers will have to pay off the judgement. IF they stay their customers. There is nothing stopping them from going to the competition (which will of course raise their prices, due to the sudden high demand).
Re:Let me guess.... (Score:5, Interesting)
So what do you suggest? Make corporations immune to fines and damages? Yes, their customers will have to pay off the judgement. IF they stay their customers. There is nothing stopping them from going to the competition (which will of course raise their prices, due to the sudden high demand).
According to this article [intomobile.com], in early 2011 AT&T had roughly 96 million customers. They can pay back a paltry $50 million dollar fine by increasing their customers monthly fee by 50 cents for one month.
I suggest making the management responsible. Depending on the level of collusion (an investigation will need to take place) certain managers should be fined or even jailed. This would certainly discourage others from hiding behind the 'corporations are people' bullshit while committing crimes that citizens would be locked away for. Another alternative is making the fine so large that they could not afford to pass it on to their customers - of course this will likely take the company down anyway, but who cares? You do the crime, you do the time.
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Wow... if regulatory capture wasn't a problem before, wait until we implement your suggestions.
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I don't disagree with you -- it is far too easy to hide behind the corporate veil in this country. But the GP advocated fining the company enough to send them into bankruptcy. That amounts to a belly-flopping high dive down the rabbit hole of unforeseen consequences.
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I don't disagree with you -- it is far too easy to hide behind the corporate veil in this country. But the GP advocated fining the company enough to send them into bankruptcy. That amounts to a belly-flopping high dive down the rabbit hole of unforeseen consequences.
That suggestion wasn't meant to be serious. I meant only to point out that fining a company is generally pointless as they can always pass it on to their customers, but only up until the point where the cost of losing customers outweighs the cost of taking the fine on the chin.
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If they could increase the fee without loosing too many customers, then they would have done it already.
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According to this article, in early 2011 AT&T had roughly 96 million customers. They can pay back a paltry $50 million dollar fine by increasing their customers monthly fee by 50 cents for one month.
That probably wouldn't even pay for the DDoS of the support it would cause when a few million customers noticed the 50 cent increase and all tried to call AT&T at once.
Consumers will foot the bil for AT&T (Score:4, Insightful)
I always laugh when a lawyer or judge or politician starts screaming about hitting a business with a financial loss to punish them for fraud or negligence or some other crime or scam. Where do they think that that money is going to come from? Do they think that the CEOs are going to pay it from their own pockets?
That money will come directly from consumers and subscribers. Most who will be completely unaware of this lawsuit. AT&T will up the rates or charge extra for other services or products and that will pay off whatever losses are from this lawsuit.
Basically only the consumers lose. The Nigerian scammers make their money. AT&T makes its money back eventually. The judges and lawyers make their money. And the consumers and taxpayers foot the bill for everything. It's a great system.
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So your solution is to never punish businesses instead?
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Since when is "fraud" just a "bad choice"?
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So it's not a bad choice to break the law?
Oh.. I see what you did there. Yes, since corporations, boards, stockholders aren't held accountable for this breaking the law ISN'T a bad choice in their eyes.
Hold the damn people accountable. Find a way.
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Re:Consumers will foot the bil for AT&T (Score:5, Interesting)
Punish them by forcing discounts on customers. Instead of paying the money directly, they pay it in reduced revenues.
Of course then there's no fees for the lawyers or fines for the government, so that'll never fly.
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Then they'll just use that as an excuse to fire people. So in the end, every punishment is going to negatively effect someone. The solution is not no punishment at all.
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You are no longer allowed to use sentences. You will be allowed to use sentences again once you've learned the difference between a complete sentence and a fragment.
If you're going to be a Grammar Nazi, at least do it well.
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Force them to pay the damages in shares of stock. Then, as the government slowly sells them on the open market, it will reduce the stock price, the investors will notice, and get pissed off at the management. Then they may take action.
This may not work, and there may be problems, but you want to get AT&T management to behave, getting the stockholders to notice is the only way I see to get the management to notice.
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Money punishments are pointless most of the time. The bosses should get punishment. A substantial decrease in pay, and if things are bad enough throw them them in jail, forbid them to be part of boards of any companies etc. That's punishment that will work!
Limited liability the way it works now gives 2 kinds of sociopaths a chance to wreak havoc: The actual sociopaths, and companies consisting of a-holes and sociopaths in the board and as directors
Re:Consumers will foot the bil for AT&T (Score:5, Insightful)
Exactly. You can't put a corporation in jail, but you can put the law-breaking decision makers there.
Incorporation protects the board of directors and management from financial losses and seizure of their personal assets. It does not protect them from prosecution for illegal activities or decisions made on behalf of the company.
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You don't punish businesses, because business are incapable of making bad decisions.
You punish executives, because they are.
Otherwise, anytime an executive makes a crooked decision and the business profits they take a big bonus, and anytime the business gets punished the shareholders take a loss. That is a recipe for the situation we're in now.
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In this case, the business (wireless) is pretty competitive - so if AT&T decided to pass on the fine to their customers they face a real risk of losing those customers to a carrier that has not incurred the fines.
Unless, of course, there is price collusion going on and all the carriers decide to jack up their rates simultaneously - but that is a different problem.
AT&T benefited from a government contract - if they were negligent or didn't manage it well they deserve to face some kind of consequences
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In this case, the business (wireless) is pretty competitive - so if AT&T decided to pass on the fine to their customers they face a real risk of losing those customers to a carrier that has not incurred the fines.
This is the market where they charge $20/Month for 300MB of data, and another $20/Month for texting.
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Dans ce pays-ci, il est bon de tuer de temps en temps un amiral^H^H^H^H^H^H CEO pour encourager les autres.
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Dans ce pays-ci, il est bon de tuer de temps en temps un amiral^H^H^H^H^H^H CEO pour encourager les autres.
Si seulement... Et donc d'améliorer le monde!
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I always laugh when some uninformed twerp says that companies just pass fines on - without stopping to consider that if the market would bear a higher price they'd already be charging it.
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Actually, no. I just get irked.
Raising prices or adding an extra fee to a customers bill WHEN THE CUSTOMER IS LOCKED INTO A CONTRACT works because the changes are still cheaper than the cost of breaking contract.
These companies don't add the fees to new contracts, they hit the locked in customers first.
Additionally, a LOT of people in the US don't have multiple options for m
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I also laugh at cunts who can't spell "bill".
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can't spell "bill".
Who are you referring to?
The word bill was only used twice in this sub-thread, and it was spelled correctly both times...
Since I just woke up, I even double checked. [google.com]
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Changing prices counts as a material change to the contract, which cannot be made unilaterally. The customer can then opt not to accept the new contract and void the agreement without incurring ETF penalties.
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That money will come directly from consumers and subscribers.
That is in fact only half-true, and is identical to the situation for taxes and increased costs of doing business.
The reason for this is the Law of Demand, which causes volume to go down when prices go up for the vast majority of goods. So, if this cost AT&T $20 per customer per month for a long time, a lot of AT&T users would switch to one of their competitors or be priced out of the market completely, and AT&T would lose too many customers. So what will happen is that AT&T will raise their
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p+c = g+s+w+m+i+c
Became
n*b = g+s+w+m+(i-c)+c
What are n and b supposed to represent?
Additionally, even if we just examine (g+s+w+m+(i-c)+c)
i-c looks like you're trying to say that the investors will eat the cost of the fine.
What planet do you live on where the management is going to try and take the money from the investors (who have the power to complain directly) when there are a thousand or a mi
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Sorry, I had originally represented p=n*b, where n was the number of customers and b was the average amount they bought per person, and forgot to edit that out of the final one.
i-c looks like you're trying to say that the investors will eat the cost of the fine.
What I was saying is that investors could end up eating the cost of the fine. Remember, if you increase the price per person too much (b in the final equation), then the number of people buying your stuff drops. So, for instance, if you raise the price $1 per month on a million customers (+$1 million), but lose 20,000 people who chip
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The idea is to hit them with a fine big enough that they can't pass it on and keep their customers. Alas, that's made meaningless by fines that can be paid out of petty cash and/or markets without adequate competition.
Fines should be levied in terms of days of profit.
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Do you really think AT&T aren't charging what they think is the price that will generate them the maximu prodit already? You think out of the goodness of their hearts AT&T is making less money by charging a lower price?
Obviously AT&T doesn't have perfect knowledge but I'm pretty sure they are trying to charge the amount to maximize profit. That means if they raise prices they'll make less money because less people will use the service (and if they lower prices they'll make less money too).
Hence
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The fact that they committed the fraud to increase their revenue in the first place disproves this idea. By your reasoning they wouldn't need to commit fraud to earn money, get convicted, and pass the conviction fine on to the customer--they could just directly charge the customer the amount of money they wanted to earn.
Any large company is going to be divided into a number of departments. The fact that one department's loss of money (from bringing government fines onto the company) can be compensated by
I was getting these calls in 2002 (Score:5, Interesting)
Back then, it was the Sprint relay service. Callers would want to buy a dozen flat panel monitors, and offer a credit card and U.S. shipping address. Card was usually bogus, but sometimes not. We accepted a few orders but when the card would not approve we just dumped them - and callers would call back to order huge quantities of more expensive gear. We actually started refusing these calls from Sprint outright, got threatened with an ADA suit, and then magically they all stopped. I wonder if Sprint figured it out, or if the clan just moved on. Our defense against the ADA complaint was that we did not do business with foreign customers, no matter the shipping address. Part of this scam was to delay the shipments, dispute the charges, get refunded, and the merchandise is gone. Card goes bad, no one to complain to, and merchants usually have no recourse with the issuer or banks. You're just out the money AND the merchandise. We didn't happen to lose a dollar, but they probably managed to nick someone.
Nice work though, AT&T being the disinterested third party for profit.
Now can we start looking into how the Universal Service Find is being hijacked to try and build the rural Internet where no provider seems willing to do so as in some cases legally required? Noooo... but crony capitalism is flourishing, thanks to the few remaining taxpayers.
Feh.
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In the mid-90s I sometimes had to handle dial-up tech support through a relay.
I felt sad for the operators. I had some where I had to give bad news to the caller that ended with the operator having to say something like "Fuck you." Again, adding anonymous to any conversation involves the "unified fuckwad theory."
This is another reason phone based tech support is the worst job in the industry.
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Yeah I also received these calls... for puppies. I kid you not we had a litter of Boston Terrier puppies for sale in the local paper and they would call through an interpreter wanting to buy the whole litter to be sent to somewhere in Texas to an alleged Petroleum Engineer. After a few calls I smelled something fishy and told them to take a hike... only to receive another hearing- and speech-impaired call with a different story a day later.
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I also got those on my cellphone (Score:3)
By now I don't remember what year it happened, but 2002 seems about right. I got a call from the internet deaf relay on a Sunday night on my work cellphone, with somebody who had a business proposition for me. I was in a noisy restaurant so I couldn't really hear the operator, and asked them to call back in the daytime; he called again the next evening. I don't think the guy really understood the concept of time zones, and he certainly didn't know that Memorial Day was a holiday and therefore a really un
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I would have refused the call even if they had called us directly, we didn't do business overseas at the time. The threat came from Sprint, and was short - lived. They probably figured it out.
Believable for AT&T (Score:5, Informative)
AT&T must have people dedicated to finding new ways to rip off customers. Just this month they retroactively increased my rates for the previous billing period. That period was consumed, billed and paid for. This month my bill goes up (an across the board $5/month increase for DSL), I look it over and see they credited part of the previous billing cycle at the old rate then charged it again at the new rate. I see no way it's legal to go into the past and charge more for services already rendered, billed and paid for.
Probably most people did not pay enough attention to even realize what they did, and for the extra $3 it's not worth going to court. It's just another example of AT&T ripping off customers in a precise way to minimize the chances of getting called on their thievery.
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[...]and for the extra $3 it's not worth going to court.
IANAL, but if there are so many customers being ripped off that way, why not start a class action lawsuit? You could get more than this tiny 3$ for each consumer involved, and could put some public attention on the poor business practices of the company.
However, not knowing a lot about the US market, maybe everyone already knows that, and many people continue to do business with AT&T...
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IANAL, but if there are so many customers being ripped off that way, why not start a class action lawsuit? You could get more than this tiny 3$ for each consumer involved
If other class action suits are a guide, the lawyers would get millions and each customer would get a $2 credit towards AT&T services.
...and many people continue to do business with AT&T...
The only other choice in my neighborhood is Time Warner Cable. Both companies are in a never ending race to see which can provide worse service, charge the most outrageous fees and implement the most consumer hostile practices.
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It's because most if not all providers pull the dirty tricks and all you ever get in a class action suit is coupons that require you to spend more money on the crooks to redeem them.
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[...]and for the extra $3 it's not worth going to court.
IANAL, but if there are so many customers being ripped off that way, why not start a class action lawsuit?
The US Supreme Court has recently decided [mobiledia.com] that AT&T is legally allowed to put "You can't form a class action suit against us" in their license agreement. Now all the ISPs are rushing to add that clause to the mix. Even Netflix is joining in [dslreports.com] on the scramble.
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for what service does AT&T bill you a month in advance? I've never had any utility that did that. My phone company bills me for what I did on the phone the prior month...they don't magically know who I'm gonna call/what I"m gonna do beforehand
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The fixed charges are likely in advance. I.e. your base plan (you know, the "$30/month" bit or whatever). It's not magic to know you're going to pay your plan's base fees.
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because you are billed a month in advance
I'll put some numbers on it to help clarify:
Bill date 2/12 - $43 (old rate) covering 1/27 to 2/26 - Paid 2/14
Bill date 3/12 - $48 covering 2/27 to 3/25, credit 2/9-2/26 at old rate, charge 2/9-2/26 at new rate.
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at&t is no better (Score:3)
than the crooks that abused the system to run their scams.
at&t fixed the problem with postcard-based registration verification but when revenues when down (due to only legitimate users, which accounted for only 20% of them, getting access to the service) they went back to a free-for-all internet-based registration and then the problem with overseas abuse returned.
of course they should pay.. and pay a hell of a lot more than 3 x 16 million for fraud...
what i would have a problem with though is if the government expects (or requires) relay operators to monitor or log conversation content and act on that content.
Left out a key part there in the summary. (Score:4, Insightful)
$16 million from the U.S. government to run Telecommunications Relay Services, intended to help the hearing- and speech-impaired
Article:
$16 million from the U.S. government to offer a calling service for the deaf that the company knew was being used by Nigerian fraudsters
There's a huge difference between these two statements. The first makes it sound like AT&T thought it was doing something good, but just so happened to be not so good.
The second makes it sound like AT&T knew what it was doing, but did it anyway.
Anyway, I'm usually not one to side with the DOJ, but I hope they kick AT&T's ass to the curb for this.
Put CEOs in JAIL (Score:5, Interesting)
Make CEOs responsible for the actions of their companies. After all, if I defauded the government of 16million dollars you bet your ass I'd be in prison, but somehow AT&T gets only a fine?
A fine that they will not even pay, since the money will actually come from their customers?
The solution is to Jail the CEO.Just ask Mitt Romney, after all, he claims the corporations are people too.
The CEOs should take responsibility, since it's the only way they can justify their outrageous salaries. It sure isn't because they've added value to the company. The S&P500 has been flat for a decade, but CEO compensation has gone up 400%.
Disclaimer: I am the 99%
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Rick Scott is the poster boy for this issue.
Cost to merchants high as well (Score:5, Funny)
Too big to care (Score:2)
It's amazing to me that this corporation keeps breaking the law, yet somehow manages to keep getting away with it. How many people will drop AT&T over this? or this? [wired.com], or this? [googleusercontent.com] Nobody.
Fault (Score:2)
How is it AT&T's fault people used their service fraudulently? That is like blaming the department of transpiration due to people running drugs in cars.
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ummm (Score:2)
Re:hucksters. (Score:5, Funny)
As a huckster, I don't appreciate you slandering my name like that.
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Mr. Johns Cammer
101 Prince Rd
JOS 930283
No-Scam State
Nigeria
Re:hucksters. (Score:4, Funny)
The Prince of Nigeria has just passed away and as heir to his throne and lawyers you will be able to sue this evil monster out of existence. All it takes is your name, SSN, address, and a good will payment of $10,000 USD forwarded to the address below using Western Union.
Mr. Johns Cammer
101 Prince Rd
JOS 930283
No-Scam State
Nigeria
Fake. The spelling is too good.
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I agree, plus the mixed case is a dead giveaway.
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I thought thought the politically correct phrase was "Deaf as a Bat" or maybe "Deaf as a Post."
Where the hell is Garrett Morris? He wouldn't charge as much, I'm sure.
Re:friendly heads up RE "hearing impaired" (Score:5, Funny)
"Hearing impaired" is not the preferred phrase
Yeah, it should be HEARING IMPAIRED!!!!!
Re:friendly heads up RE "hearing impaired" (Score:4, Funny)
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It's the euphemism treadmill. People come up with a euphemism to describe a negative condition without the negative connotations associated with the original word. Unfortunately, the reason why the word had negative connotations in the first place is because the condition it described was undesirable. So the euphemism picks up the negative connotations that it was specifically created to avoid, and a new euphemism is necessary. The process then repeats. You can see this in a number of places. My favorite is
Re:friendly heads up RE "hearing impaired" (Score:4, Informative)
and i'm "hearing impaired" i hate it when people do stupid shit like this to be more "politically correct"
I dated a girl once that was deaf in one ear. She preferred to call it "deaf in one ear".
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hard to keep track of the correct nomenclature to describe myself
I really don't understand this.
Why do you even need "correct nomenclature"?
Language has a wonderful habit of providing words to describe things, and English is pretty damned complete.
You have a Vagina == You are female.
You like to have sex with members of the same sex == You are homosexual.
You like to have sex with members of the opposite sex == You are Heterosexual.
You like to have sex with members of either sex == You are Bisexual
You like to have sex with members of other species == You are
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The term focuses on what people can’t do. It establishes the standard as “hearing” and anything different as “impaired,” or substandard, hindered, or damaged. It implies that something is not as it should be and ought to be fixed if possible.
It doesn't imply a damned thing. It says it clearly, IMPAIRED.
(Impair) To weaken, make worse, to lessen in power, diminish, or relax, or otherwise affect in an injurious manner.
Functional hearing is part of the baseline for human capability.
If you are not able to hear, then that is something that is not functioning within normal parameters.
This lacking functionality makes it harder to perform some tasks. There is no arguing with that.
Non functional or impaired hearing is a negative state.
It i
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already done here.. we block over half their entire continent right at the firewall.. same with china and a few other countries as well. we don't do business there, so they have no real need to access our web sites, content, contact details and forms, online ordering, etc. soon as we did that, over 2/3rds of the hacking attempts (looking for XSS exploits, etc) on our web sites went away, and so did virtually all of the spam sent via our web forms.
we don't sell over the phone either -- we're a cash (mainly)