Business Victimized by Phone Hacker Could Go Broke in AT&T Lawsuit

A Massachusetts small business that was victimized by a hacker who broke into a phone system and made calls to Somalia could go broke if AT&T prevails in a lawsuit to collect on the massive charges.

Todd Tool and Abrasive Systems of Ipswich, Mass., is defending itself against a suit that seeks $1.15 million in charges and interest for a four-day period in September 2009 when $891,470 worth of phone calls were incurred, The Salem News reported.

Michael Smith, the owner of the business that makes equipment and supplies for machine shops, told the newspaper that the size of the bill could force him into bankruptcy.

Ironically, AT&T wasn’t even Todd Tool and Abrasive Systems’ phone company; Verizon was, but the hacker apparently managed to use a “dial-around” long-distance service, according to the report. Smith told The Salem News that Verizon noticed an unusual amount of international call activity one weekend and shut down the company’s ability to make such calls, then a few months later wrote off the $260,000 bill.

AT&T isn’t being so generous.

AT&T declined to comment to The Salem News. However, the report said the phone giant is basing its case on two legal theories: that the business should have taken more precautions to prevent unauthorized access to its phone system, and that under Federal Communications Commission regulations, AT&T is entitled to collect from the owner of the phone line that was used to make the call, no matter who actually dialed.

Should AT&T win its case, its lawyers may well be the only ones who will claim that justice prevailed.

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