Court dismisses $200M claim in AT&T SIM-swap scam case

A judge in California has dismissed a case for damages against telecoms giant AT&T (NYSE: T) over its alleged role in a SIM-swap scam, which could have seen the company liable for a $200 million payout.

Judge Otis Wright II found in support of AT&T over the claim from digital currency investor Michael Terpin, dismissing his allegations that AT&T had concealed and misrepresented its role in the hack.

The attack saw Terpin lose more than $24 million at the hands of the scammers, who allegedly managed to successfully swap his SIM details to access digital currency holdings secured via his phone number. The court, however, dismissed Terpin’s case and the concurrent claim for punitive damages.

The court said AT&T’s terms and conditions did not guarantee protection from third-party breaches, and no attempt was made by the company to conceal or misrepresent the limits of its security measures.

According to Terpin, promises made around the strength of 2FA security were designed to keep him as a customer, while in reality they had no intention of ensuring the security of his information.

While the court agreed that AT&T had been ‘overly optimistic’ in its promises over security, these differ from false promises, and it could not be shown that AT&T has misled him over the protection offered by 2FA.

The claim for $200 million relied on allegations that AT&T had been fraudulent and negligent, which were not found on the evidence. However, Terpin was given leave to file for punitive damages over a separate claim, which could see further deliberations in court over the coming months.

The case against AT&T was first brought back in 2018 after Terpin succumbed to several similar SIM swap attacks. According to Terpin, AT&T knew he was being targeted by scammers looking to access his digital currency holdings.