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Friday, June 21, 2024 | Back issues
Courthouse News Service Courthouse News Service

AT&T Customers to Get $80M for ‘Cramming’

(CN) - As part of a $105 million "mobile cramming" settlement with the Federal Trade Commission on Wednesday, AT&T Mobility will pay $80 million in consumer refunds.

The settlement, filed simultaneously with a complaint in Atlanta, Ga., in involves all 50 states and the District of Columbia. In addition to the refunds, AT&T will pay $20 million in penalties to the states and D.C., plus a $5 million for the Federal Communications Commission.

AT&T Mobility's cramming, as alleged in the complaint, involved its practice of charging customers up to an extra $9.99 a month for unauthorized text-message subscription services such as wallpaper, trivia, horoscopes, celebrity gossip and love tips. The settlement is the first on a national scale to address mobile cramming practices.

Third-party billing occurs when a phone company bills for services offered by another company, then skims a percentage of the charge. AT&T allegedly kept 35 percent of what it charged customers for the unordered services.

"AT&T had strong reason to suspect that the charges were unauthorized, yet continued to place these charges on its customers' bills," FTC Chairwoman Edith Ramirez said in a statement.

Indiana Attorney General Gregory Zoeller called the case "a good reminder that people should pay close attention to their bills for any questionable fees or extra charges."

Third-party charges can be hard to identify on consumer bills. AT&T listed these charges as "AT&T Monthly Subscriptions", the FTC said.

The FTC has placed a significant focus on mobile cramming since 2013. T-Mobile US Inc. is still fighting similar charges filed against it in July, and Amazon.com also faces a similar complaint involving its Kindle Fire tablets.

Consumers can get AT&T refund information at www.ftc.gov/att or by calling (877) 819-9692.

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