According to the Federal Trade Commission (FTC), AT&T will be refunding more than $88 million to over 2.7 million users who were unfairly charged in their bills by third parties. About a couple of years ago, the major US wireless carrier had agreed to pay a penalty in the amount of $105 million as settlement for an investigation conducted by the Federal Communications Commission (FCC). In that investigation, the FCC had found that AT&T had billed certain subscribers for hundreds of millions in unauthorized subscriptions and premium SMS services. The $105 million settlement was the biggest ever in the history of the FCC, and was made possible through the help of the FTC and attorneys general of every state in America and Washington, DC.
A chunk of the $105 million penalty was paid to states and the FCC, while the remaining $88 million will be used for a refund program to be administered by the FTC. The FTC also pointed out that under the terms of the settlement, AT&T will have to make significant changes to its process of billing involving third parties.
The FTC further explained that via its refund program, close 2.5 million existing AT&T subscribers will get to receive a credit on their bill within the next 75 days, and over 300,000 former subscribers of the wireless carrier will receive a check. The average refund amount is around $31. The FTC also revealed that based on the investigation, the unauthorized charges usually amounted to $9.99 a month for ring tones and text message subscriptions for stuff such as horoscopes, love tips, and trivia. AT&T has been accused of pocketing at least 35 percent of those unauthorized charges. However, the mobile operator has started sending out refunds this week, mostly in the form of checks and credits on the customers’ phone bills, to those who had filed claims with the FTC.
Of course, AT&T is not the only wireless carrier in the US to be accused of cramming or similar practices. As a matter of fact about three years ago, T-Mobile and Sprint (along with AT&T) inked an agreement with 45 states in America to put an end to billing mobile users for premium SMS they received. Although industry leader Verizon Wireless was not part of that settlement, the Big Red did state that it would stop the practice. And then back in 2014, T-Mobile was made to pay $90 million as settlement for an FCC investigation on T-Mobile allegedly billing customers for millions of dollars’ worth of unauthorized third party subscriptions and premium SMS services.
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