AT&T Fined $105M for 'Cramming' Cell Phone Bills
AT&T will pay $80 million in refunds to customers for billing them for unwanted services and not reacting fast enough to reverse the charges when they complained.AT&T Mobility is being fined a record $105 million by the Federal Communications Commission and the Federal Trade Commission for illegally "cramming" customer cell phone bills with extra, unauthorized charges and for refusing to adequately remove the charges when users complained. The $105 million fine, which includes $80 million for direct refunds to customers as well as $25 million in penalties to be paid to the FCC, the FTC and to attorney generals across the United States, is the largest fine in the history of the FCC, according to the agency. The enforcement action was announced in a Washington press conference on Oct. 8 and ends an investigation that had centered on allegations that AT&T had for years "billed customers millions of dollars in unauthorized third-party subscriptions and premium text messaging services," according to the FCC. Consumers had been reporting incidents to the FCC about the bill-cramming practices for years, which resulted in extra charges that had never been authorized by cell phone customers, the agency said. Most of the charges were for $9.99 monthly fees for extra services, such as horoscope text messaging, celebrity gossip, fun facts or other third-party content that was provided by companies outside AT&T. The charges were posted on cell phone bills, however, under listings for AT&T services, according to the FCC.
"Today's enforcement action is a victory for consumers nationwide," FCC Chairman Tom Wheeler said during the press conference. "Carriers should be on notice that we will not tolerate any business practice that saddles consumers with unauthorized charges on their phone bills. This settlement—a joint effort between the FCC, FTC and all 50 states and the District of Columbia—is a prime example of government agencies working together on behalf of American consumers."