AT&T to Pay $105 Million in 'Cramming' Settlement - East Idaho News
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AT&T to Pay $105 Million in ‘Cramming’ Settlement

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Thinkstock 100814 ATT?  SQUARESPACE CACHEVERSION=1412804716718ljhimages/iStock Editorial/Thinkstock(WASHINGTON) — The Federal Trade Commission announced on Wednesday that AT&T agreed to pay $80 million as part of a settlement for “mobile cramming,” in which they billed customers for unauthorized third-party charges.

The FTC complaint accuses the mobile company of billing customers for “hundreds of millions of dollars in charges originated by other companies, usually in amounts of $9.99 per month” for services including ringtones and text messages containing love tips, horoscopes and “fun facts.” AT&T, the FTC says, kept at least 35 percent of that money.

In addition to the $80 million that will be used to give refunds to illegally billed customers, AT&T will also pay $20 million in penalties and fees to 50 states and the District of Columbia and a $5 million penalty to the Federal Communications Commission.

FTC Chairwoman Edith Ramirez said she was “very pleased” by the settlement, which “will put tens of millions of dollars back in the pockets of consumers harmed by AT&T’s cramming of its mobile customers.

In 2011, AT&T allegedly received more than 1.3 million calls to its customer service department about third-party charges.

AT&T, the FTC said, changed its refund policy in 2011 so that customer service representatives could only refund two months’ worth of charges, regardless of how long the unauthorized charges had been posted to a customer’s bills. The company, however, did not act to determine whether third parties had received authorization to charge customers for their “services.”

AT&T will be mandated to notify all current customers who were billed for unauthorized third-party charges of the settlement and the available refunds. Additionally, the company will have to receive “express, informed consent” before they can bill customers for any third-party services on their mobile bill.

FCC Chairman Tom Wheeler called the settlement the largest ever for “cramming,” and the $105 million total “historic.” He also noted that “for too long, consumers have been charged on their phone bills for things they did not buy…it stops today for AT&T.”


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