AT&T to Pay $105 Million to Settle Accusations It Billed for Bogus Fees
FTC ‘Cramming’ Complaint Says Carrier Added Hundreds of Millions in Third-Party Charges to Subscribers’ Bills
As part of the settlement, AT&T will pay $80 million to the Federal Trade Commission to provide refunds to customers who were billed for unauthorized charges, along with $20 million to the states and $5 million to the Federal Communications Commission in penalties. AT&T must notify all current customers who were billed for unauthorized charges; customers who believe they are eligible for a refund can contact the FTC to submit a claim.
An AT&T spokeswoman, in an email, said: “While we had rigorous protections in place to guard consumers against unauthorized billing from these companies, last year we discontinued third-party billing for PSMS services.”
“Today, we reached a broad settlement to resolve claims that some of our wireless customers were billed for charges from third-parties that the customers did not authorize. This settlement gives our customers who believe they were wrongfully billed for PSMS services the ability to get a refund,” the spokeswoman said.
AT&T must also obtain customers’ express consent before placing any further third-party charges on their wireless bills, must clearly indicate the charges on monthly bills, and give customers the option to block third-party charges altogether.
The wireless carriers have argued in the past that most third-party charges are authorized. In some cases, customers can sign up by downloading a ringtone or responding to a text, without realizing it comes with a subscription fee. In other instances, customers are billed without any action on their part, a clear-cut case of cramming.