![AT&T]( "AT&T")
Settlement will lead to consumer refunds
Settlement will lead to consumer refundsAT&T this week agreed to pay out $105 million in fines and refunds to settle "mobile cramming" charges against the company. According to the Federal Trade Commission, the settlement is the largest ever with a prominent mobile phone carrier. As part of the settlement, AT&T will pay the FTC $80 million to provide refunds to customers, $20 million in penalties, and a $5 million penalty to the Federal Communications Commission.
"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."
Cramming is the practice of billing customers for unauthorized third-party charges. These come in many forms, including ringtone charges, text messages containing love tips or horoscopes, and other types of services or information that may not have signed up to receive.
During its investigation, the FTC found that AT&T had received "very high volumes of consumer complaints" that had to do with unauthorized third-party charges -- more than 1.3 million calls in 2011 alone. In some cases, the cramming charges accounted for 40 percent of the bill.
Making matters worse, AT&T's bill structure made it difficult to know that third-party charges were being placed, the FTC says. On the first page of printed bills and summary section of online bills, consumers would only see a total amount due and due date. On other pages, the fees would be listed simply as "AT&T Monthly Subscriptions," which made it seem like charges were part of services provided by AT&T.
