AT&T has agreed to pay $105 million to the its customers for adding unauthorized cell phone charges. According to the Federal Trade Commission and Federal Communications, the telecom company will re-pay all of the amount that it charged its customers without any authorization. First AT&T will pay nearly $80 million to the Federal Trade Commission, which then will be used by the commission for consumer refunds, consumers can claim their refund at ftc.gov/att.
However, AT&T will also be paying an amount of $20 million to the state governments for settling the issue and a penalty of $5 million to the US Treasury. The company used to add fake charges about additional monthly subscriptions such as ringtone and horoscopes.
AT&T charged its customers with bogus monthly subscriptions for ringtones, horoscopes, flirting tips and many others. While a few were only $9 a month, other were as high as $60 a month. Customers complained to the company about it and said that they haven’t activated any such service from AT&T.
“AT&T told these companies that it would ‘help lower refunds’ by only providing refunds up to two months worth of charges,” Edith Ramirez, Chairwoman of the FTC, said during a Wednesday press conference.
“For too long, consumers have been charged on their phone bills for things they did not buy,” Wheeler said today. “It’s estimated that 20 million consumers per year are caught in this type of [cramming] trap, [but] it stops today for AT&T.”
“Today, we reached a broad settlement to resolve claims that some of our wireless customers were billed for charges from third-parties that the customers did not authorize,” AT&T said in a statement. “This settlement gives our customers who believe they were wrongfully billed for PSMS [Premium Short Messaging Services] services the ability to get a refund.”