AT&T Crammed Customers, Agrees To $105 Million Settlement
By Jim Donovan
PHILADELPHIA (CBS) -- As part of a $105 million settlement with federal and state law enforcement officials, AT&T Mobility LLC will pay $80 million to the Federal Trade Commission to provide refunds to consumers the company unlawfully billed for unauthorized third-party charges, a practice known as mobile cramming.
In its complaint against AT&T, the FTC alleges that AT&T billed its customers for hundreds of millions of dollars in charges originated by other companies, usually in amounts of $9.99 per month, for subscriptions for ringtones and text messages containing love tips, horoscopes, and "fun facts." In its complaint, the FTC alleges that AT&T kept at least 35 percent of the charges it imposed on its customers.
Beginning today, consumers who believe they were charged by AT&T without their authorization can visit www.ftc.gov/att to submit a refund claim and find out more about the FTC's refund program under the settlement. If consumers are unsure about whether they are eligible for a refund, they can visit the claims website or contact the settlement administrator at 1-877-819-9692 for more information.
The FTC's investigation into AT&T showed that the company received very high volumes of consumer complaints related to the unauthorized third-party charges placed on consumer's phone bills. For some third-party content providers, complaints reached as high as 40 percent of subscriptions charged to AT&T consumers in a given month. In 2011 alone, the FTC's complaint states, AT&T received more than 1.3 million calls to its customer service department about the charges.
According to the complaint, in October 2011, AT&T altered its refund policy so that customer service representatives could only offer to refund two months' worth of charges to consumers who sought a refund, no matter how long the company had been billing customers for the unauthorized charges. Prior to that time, AT&T had offered refunds of up to three months' worth of charges. At that time, AT&T characterized its change in policy as designed to "help lower refunds."