AT&T pays $105M to settle claims of unauthorised mobile charges

AT&T pays $105M to settle claims of unauthorised mobile charges

09 OCT 2014

AT&T said it will pay federal and state authorities a combined total of $105 million to settle claims it unlawfully billed for unauthorised third-party charges, a practice known as ‘cramming’.

AT&T Mobility will stump up the bill, $80 million of which goes to the Federal Trade Commission (FTC) to cover the cost of customer refunds.

The settlement also includes $20 million in penalties and fees paid to 50 states and the District of Columbia, as well as a $5 million penalty to FCC, the US telecoms regulator.

Complaints about mobile cramming have been going on for years and they typically involve premium text messages, such as flirting and horoscope information, charged at $9.99 per month.

Provided by third parties, these services are not asked for by the customer. FTC has long contended that mobile operators indulging in this practice do not make clear what the $9.99 charge relates to. Moreover, in its complaint, FTC alleges AT&T kept at least 35 per cent of the charges it imposed on its customers.

“I am very pleased that this settlement will put tens of millions of dollars back in the pockets of consumers harmed by AT&T’s cramming of its mobile customers,” said FTC chairwoman Edith Ramirez.

“This case underscores the important fact that basic consumer protections – including that consumers should not be billed for charges they did not authorise  – are fully applicable in the mobile environment.”

An AT&T spokesman, in an emailed statement quoted by Reuters, said the operator now had “rigorous protections” against unauthorised billing, although it no longer offers premium short messaging services (PSMS).

“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 authorise,” reads the statement. “This settlement gives our customers who believe they were wrongfully billed for PSMS the ability to get a refund.”

AT&T consumers who believe they were wrongly charged can now visit the FTC website to submit a refund claim.

This is FTC’s seventh mobile cramming case since 2013, and the second against a mobile operator. The trade body filed a complaint against T-Mobile US in July.

Author

Ken Wieland

Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight...More

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