A new whistleblower lawsuit is taking issue with phone bill surcharges from some of the top telecommunications companies.

Filed by a private consultant working for the U.S. government, the whistleblower says that AT&T, Verizon and Sprint committed fraud against hundreds of government agencies by pocketing phone bill surcharges, including those made for emergency purposes or to 911.

According to the lawsuit, the whistleblower conducts rate analysis and billing audits for numerous companies as well as the government and reportedly has first hand knowledge of the improper phone bill surcharges.

After learning of the alleged fraud in 2013, the whistleblower filed a complaint under the federal False Claims Acts.

The FCA contains qui tam, or whistleblower, provisions. Qui tam is a unique mechanism in the law that allows citizens with evidence of fraud against government contracts and programs to sue, on behalf of the government, in order to recover the stolen funds.

In compensation for the risk and effort of filing a qui tam case, the whistleblower or “relator” may be awarded a portion of the funds recovered, typically between 15 and 25 percent.  A qui tam suit initially remains under seal for at least 60 days during which time the U.S. Department of Justice can investigate and decide whether to join the action.

However, the initial illegal phone bill surcharges lawsuit was dismissed without prejudice, meaning the court allowed the complaint to be re-filed once any defects were addressed.

What’s interesting in this whistleblower case is that AT&T contends the lawsuit is not a qui tam lawsuit. The company’s basis for this argument is that the whistleblower is not an “insider”, thereby rendering the suit as general.

Essentially, AT&T asked the court to dismiss the lawsuit on grounds that since the whistleblower was never an employee of AT&T, he can’t have insider information, and therefore cannot file a claim under the FCA.

At this time, the government has not joined the whistleblower lawsuit against the telecom giants, but it has indicated that whistleblowers can be outside consultants and can receive a whistleblower award for reporting fraud against the government.

Exposing Illegal Phone Bill Surcharges

The majority, if not all, phone bills contain numerous surcharges and taxes.  Most of the time, consumers don’t question what these fees really are since they are typically miniscule, usually under $5.

However, recent news investigations and reports have uncovered that many phone companies are actually pocketing these phone bill surcharges – at the expense of their customers.

One of these phone bill surcharges is the 911 fee.  A portion of this fee is supposed to go to emergency dispatch services, but instead some telecommunications companies are pocketing a larger share of the 911 surcharge.  These deceptive practices defraud local governments of the money they count on to support their services.

What Can You Do?

If you have insider knowledge about deceptive or fraudulent phone bill surcharges, you have the right to bring a whistleblower lawsuit under the False Claims Act.

Whistleblowers who successfully bring a lawsuit under the FCA can be awarded between 15 percent and 30 percent of the amount collected by the government.  An experienced whistleblower attorney can guide you through the legal process in filing a qui tam lawsuit.