Congressional Chair Asks Google and Apple to Look Into Tax Fraud on Messaging App Telegram

Telegram Scam 2022

Rep. James Clyburn, a Democrat and Congressional Chair from South Carolina, has made a request to Google and Apple to help prevent fraud against U.S. taxpayers on the app Telegram.

This request comes after a report from ProPublica last last July and this January revealed cybercriminals were using Telegram to sell and trade stolen identities and methods for filing false unemployment insurance claims.

Telegram and Fraud

Rep. Clyburn, who chairs the congressional subcommittee cited documents from a ProPublica report in March 23 that covers letters to the CEOs of Apple and Alphabet, Google’s parent company. The letters from ProPublica pointed out that allowing fraud against American taxpayers is a contradiction for Apple and Google’s policies within each respective app store. Both companies forbid apps that facilitate or promote illegal activities.

Additionally, Clyburn also requested that the two companies provide “all communications” between the companies and Telegram. These communications include anything “related to fraud or other unlawful conduct on the Telegram platform.” This would also include fraud against pandemic relief programs implemented after COVID-19. The two companies have also been asked to submit documentation showcasing policy and practices the companies have implemented to monitor whether applications in the respective app stores are being used to facilitate fraud. Both Google and Alphabet have until April 7 to provide the records.

Distributing Fraud

Both Apple and Google’s app stores serve as distribution channels for messaging services such as Telegram. The messaging app is currently one of the most downloaded apps in the world. Telegram CEO Pavel Durov has noted the importance of following the guidelines imposed by each app store’s policies. The CEO has acknowledged that the company does its best to adhere to all App Store policies. Durov also notes that the removal of Telegram from Google’s and Apple’s app stores would spell certain doom for the messaging service.

With Clyburn making appeals to both smartphone producers directly, this increases the pressure on Telegram. The representative’s letter notes that Telegram’s current terms of service only prohibits users from scamming other Telegram users. This suggests that the platform’s TOS does not explicitly have rules against scamming those that do not use the app.

The representative faulted Telegram for allowing users to spread information regarding defrauding state unemployment systems on its platform. In turn, this failure to stop users from spreading information may enable fraud on a larger scale.

A Representative Makes Appeals

In December, Clyburn wrote to Durov asking what efforts Telegram has implemented in preventing the platform from being used for large-scale fraud. Telegram “refused to engage” with the subcommittee. It is worth noting that the app received a ban in Brazil for a period. This is due to not responding to government complaints. Brazil lifted the ban after receiving a response.

In a statement to ProPublica, the messaging app notes that it is working toward expanding its terms of service and moderation efforts. This in turn is meant to stop the misuse of the platform. The company also states that they have banned millions of accounts and chats for violating terms of service.

However, moderation efforts can be tricky. During a ProPublica inquiry in July, Telegram was forced to shut down some public channels on its app. This is due to users advertising methods for filing fake unemployment insurance claims using stolen identities. Even if a scammer receive a ban, creating or recycling new accounts is easy.

Freedom of Speech

To complicate matters, Telegram insists on a hands-off approach to policing content on the messaging app. This is central to the company’s business model. In September, Durov posted a blog championing the app’s freedom of speech.

The company’s admiration for freedom of speech caused Russia to ban Telegram in 2018. This is due to the company refusing to hand over encryption keys to the country. Russia repealed the ban two years later. Now, Telegram is receiving credit as a rare place for Russians to find uncensored news concerning Ukraine.

However, the commitment to privacy has drawbacks, such as attracting cybercriminals. When the COVID-19 pandemic prompted Congress to authorize hundreds of billions of small-business loans and additional aid, Telegram lit up with channels offering methods to defraud these programs.

How large of an impact this fraud has had is yet unknown. The size alone has prompted the Department of Justice to announce the appointment of a chief prosecutor to focus on the most egregious cases of fraud.

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