Wednesday, October 9, the FEDERAL TRADE COMMISSION announced that telecommunications giant AT&T will pay $105 million to federal and state authorities to settle charges that the carrier placed unauthorized charges for third-party services on customers' mobile phone bills!!!
USA TODAY reports over about five years beginning in 2009, the carrier billed customers for hundreds of millions of dollars in subscriptions and premium text-messaging services, many of which were not authorized by consumers in a practice called "cramming," said FTC Chairwoman EDITH RAMIREZ.
The nation's second-largest wireless carrier will pay the FTC $80 million to provide refunds to consumers. AT&T will pay $20 million in penalties to states and a $5 million penalty to the Federal Communications Commission.
FTC Chair EDITH RAMIREZ said;
AT&T "unlawfully placed charges on its customers' mobile phone bills for monthly subscriptions that customers never authorized and didn't want. (The settlement) while focused on the fast-growing mobile industry, underscores a time-tested principle of consumer protection: Consumers must not be charged for goods or services that they did not authorize, whether it's on their mobile phone, shopping online or in a brick-and-mortar store."
The hundreds of millions of dollars in charges originated from other companies, typically at $9.99 per month, for subscriptions for ringtones and text messages containing love tips, horoscopes and other services, the FTC says. AT&T kept at least 35% of the charges imposed on customers, the agency found.
FCC Chairman Tom Wheeler called the deal the largest cramming settlement in history and noted that the action "is the first, but not the last, joint enforcement effort of the FCC, FTC and (state) attorneys generals."
In recent months the FTC has filed suit against cell provider T-Mobile accusing it of "cramming" hundreds of millions of unauthorized charges on phone bills and, in a separate case, online retailer Amazon.com of billing parents for millions of dollars in unauthorized in-app purchases on Kindle Fire tablets and other devices. Those suits remain in litigation, said FTC spokesman Jay Mayfield.
About 20 million consumers each year are victims of cramming, Wheeler said. "For too long consumers have been charged on their phone bills for things they did not buy," he said. "It stops today for AT&T."
AT&T consumers who think they were charged without their authorization can visit the FTC website to submit a refund claim or call the settlement administrator at 877-819-9692 for more information.
AT&T and other major carriers have ended the type of third-party charges involved.
AT&T spokesman Mark Siegel confirmed that the company had settled with the agencies "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 ... the ability to get a refund."