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Federal judge rejects motion to dismiss $224M SIM-swapping lawsuit against AT&T

By Cal Jeffrey · 5 replies
Jul 23, 2019
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  1. Last year, we reported on a man named Michael Terpin who was suing AT&T for allowing his mobile phone to be SIM-swapped not once but twice. SIM-swapping is when scammers contact a carrier pretending to be their target in order to port the victim’s number to a SIM card that they control.

    The scams cost Terpin $24 million in cryptocurrency which was stolen by Nicholas Truglia (aka the "Bitcoin Bandit") who was the head of a SIM-swapping group called “OG Users.”

    Terpin’s lawsuit alleges the violation of the Federal Communications Act (FCA), breach of contract, and other laws. He seeks restitution of his $24 million, plus punitive damages of $200 million.

    The telecom giant’s legal team requested Judge Otis Wright disregard a 2011 FCC consent decree that ordered protection of the data privacy of AT&T customers. The motion was flatly rejected.

    "Mr. Terpin’s claim … seeks to declare AT&T’s wireless customer agreement as unconscionable, void against public policy, and unenforceable in its entirety."

    “Judge Wright strongly repudiated AT&T’s audacious bid to prevent Michael from demonstrating to a jury the carrier’s contempt for consumers’ privacy and utter disregard of its legal obligations to prevent this very type of SIM swap and financial crime,” said Pierce O’Donnell, Terpin’s chief legal counsel said in a press release. “The evidence will show that AT&T not once, but twice allowed hackers posing as Michael to obtain his SIM card.”

    Judge Wright said that Terpin had sufficiently shown that AT&T had allowed unauthorized access to his account, a violation of the FCA.

    Furthermore, Terpin contests the wireless consumer agreement that indemnifies AT&T from liability even in the face of its own negligence. Terpin alleges that the contract is null and void because the provisions are not legally acceptable. Judge Wright feels these claims need to be hashed out in court.

    “AT&T and Mr. Terpin have adverse legal interests of sufficient immediacy and reality to warrant a claim for declaratory judgment,” said Wright. “The terms of the wireless customer agreement are directly implicated by this lawsuit, particularly the terms that Mr. Terpin has identified.”

    Terpin has 21 days to amend any of his claims.

    Permalink to story.

  2. Uncle Al

    Uncle Al TS Evangelist Posts: 5,677   +4,024

    BRAVO! It appears that more than a few Federal Judges have grown a set in the past year ...... we can only hope the trend keeps up!
    lipe123, OptimumSlinky and psycros like this.
  3. psycros

    psycros TS Evangelist Posts: 2,821   +2,666

    Its long past time that the most expensive and consumer-unfriendly wireless carriers in the free world get held to account. Hopefully this will be start a class action tsunami that gets a lot of stolen customer money back.
  4. PEnnn

    PEnnn TS Addict Posts: 141   +116

    Exactly same thing happened to a tech writer (forgot what website / publication) a few weeks ago with a phone from T-Mobile.

    I t seems it just takes a phone call to (T-Mobile) to tell them you have a new SIM and you can take over someone else's phone!!
  5. Squid Surprise

    Squid Surprise TS Evangelist Posts: 2,600   +1,587

    The judge hasn’t ruled against AT&T yet.... let’s not be so hasty to laud him... he just hasn’t dismissed the case... let’s wait to see what the actual verdict is - it might even be settled out of court.... I’m betting on a settlement myself...
  6. bexwhitt

    bexwhitt TS Evangelist Posts: 416   +129

    AT%T will settle if this goes to trial there is a good chance they are screwed.

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