FTC: AT&T To Refund $80 Million in Bogus Wireless Charges
Telecom giant AT&T must refund $80 million to consumers who were illegally billed for unauthorized third-party charges, a practice known as mobile cramming, according to the Federal Trade Commission.
The refunds, part of a $105-million multi-agency settlement, include $80 million to the FTC, which will administer the payouts, $20 million in penalties and fees paid to 50 states and the District of Columbia, and a $5 million penalty to the Federal Communications Commission.
Billed for Ringtones, Love Tips
In its complaint against AT&T, the FTC alleged 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." The FTC claimed that AT&T kept at least 35 percent of the charges it billed 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 authorize -- are fully applicable in the mobile environment."
Consumers who believe they may be eligible for a refund can go to http://www.ftc.gov/att and apply for one.
The case against AT&T is part of a larger FTC effort to clamp down on mobile cramming. This is the FTC's seventh mobile cramming case since 2013, and its second against a mobile phone carrier this year. In July, the FTC filed a lawsuit alleging that T-Mobile padded its profits in recent years with charges concealed on its bills and not ordered by its customers.
The FTC also alleged that T-Mobile charged consumers monthly fees from third-party merchants offering bogus text message subscriptions for things like flirting tips, horoscopes, and celebrity gossip. According to the FTC, T-Mobile kept charging for the services even after subscribers complained, and that the company typically retained between 35 percent and 40 percent of the fees.
The FTC also issued new guidelines in July for mobile carriers aimed at better protecting consumers against mobile cramming. However, the guidelines are recommendations only, and do not come with any new regulatory teeth.
Millions of Complaints
The FTC's investigation into AT&T's alleged practices found that the company had high numbers of consumer complaints related to the unauthorized third-party charges. 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 said, AT&T received more than 1.3 million calls to its customer service department about the charges.
In October 2011, AT&T changed its refund policy and only offered refunds of two months' worth of charges to consumers asking for refunds, no matter how long the company had been billing those customers for the unauthorized charges, according to the FTC complaint.
Before that, 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," the FTC noted. Additionally, the company denied refunds to many consumers, and in other cases referred the consumers to third parties to seek refunds for the money consumers paid to AT&T, according to the complaint.
In addition to the refunds, AT&T is now required to get consumers' express, informed consent before placing any third-party charges on their mobile phone bills. The company must also clearly indicate any third-party charges on consumers' bills and provide consumers with the option to block third-party charges from being placed on their bill.
Posted: 2015-01-27 @ 5:27pm PT
I would like a refund. I have had 3 phones forever I think we all should get a break. It is so expensive for us to have a phone anyway. I have to have ours for our job.
Anthony J. Perdew:
Posted: 2015-01-22 @ 1:13pm PT
I have two phones. The first phone gets charged $9.99 for FamilyTalk Nation. The second phone gets charged $50.00, AT&T Monthly Subscription and $9.99 for Total AT&T Monthly Subscription. Both phones are under my name so why am I being charged double? Is it because there are two different phone numbers? Do they go by phone numbers and not contract name ?
Posted: 2015-01-15 @ 11:39am PT
Just give me my damn refund.
Posted: 2014-10-15 @ 7:43am PT
I would like to file also.
Posted: 2014-10-09 @ 3:23pm PT
@Mary: We've repeated the link a few times, and here it is again:
If you go to that FTC site, you'll see a big button that says APPLY FOR A REFUND.
Hope that helps.
Posted: 2014-10-09 @ 3:19pm PT
I would like to file for my refund, don't know how. I can't seem to find the correct site to file for a refund. Please help.
Posted: 2014-10-09 @ 11:00am PT
AT&T bought Cingular Wireless. It was an appropriate acquisition. In this case, one thief getting another thief's loot.
Posted: 2014-10-08 @ 8:16pm PT
I think AT&T ripped me off.
Posted: 2014-10-08 @ 6:13pm PT
@Winifred: Go to http://www.ftc.gov/att
Posted: 2014-10-08 @ 6:11pm PT
I would like to file complaint. Can't find the right notice.
Posted: 2014-10-08 @ 3:30pm PT
@Barbara: We included the link in the story above and for more info, you can go directly to: http://www.ftc.gov/att
Posted: 2014-10-08 @ 3:23pm PT
Where can you find the site to file for the refund that at&t owes me for this $80 million lawsuit refund issue?
Posted: 2014-10-08 @ 2:30pm PT
AT&T also bills fraudulent third party charges on land lines. Filing a complaint with the California state attorney general's office is what finally got them to reverse the charges.