Customers of AT&T who filed for refunds after experiencing unwanted charges on their phone bills may not be able to get full reimbursement from the US major wireless carrier. The reason: there is just not enough money to go around. Yikes.
As of this writing, over 3 million current and former subscribers of AT&T have sent their applications for refunds as part of a settlement with the Federal Trade Commission (FTC) over illegal charges that have been "crammed" on their phone bills. The FTC had determined that third parties had utilized the carrier's premium text messaging service and then AT&T then charged the use of this service to its subscribers.
AT&T has agreed to pay an amount of $80 million in order to pay its settlement. But with more than 3 million filing for reimbursement, some people may end up getting only a portion of what they are actually owed.
Among the four biggest wireless carriers in the United States, AT&T was the first to settle with federal officials over cramming charges by offering reimbursement. Other major wireless carriers like Sprint, T-Mobile, and even Verizon Wireless followed suit, with total settlements amounting to a combined $353 million, $267.5 million of which to be paid to affected customers, who were given until May 1st of this year to file for refunds.
Of course, the amount of reimbursement will surely vary per customer and depending on the carrier. As stated by AT&T, only the FTC can decide how much each affected customer will get to receive. As for the FTC, it is still in the process of determining exactly which of the 3 million applicants are actually qualified to get a refund, and the agency further notes that the $80 million paid by the carrier may not suffice.
AT&T actually had a $105 million settlement with the FTC, but only it was only required to pay $80 million to the agency, which is charged with distributing this amount to victims of the carrier's fraudulent charges. On top of that, AT&T will also be paying $20 million in penalties to 50 states and Washington, DC, plus a $5 million penalty to the FTC.
With this latest development, perhaps many disgruntled customers, especially those of other major wireless carriers, will be asking: Will the same thing happened to their applications for refunds, too?
T-Mobile will be paying $90 million to fully reimburse all its customers. If this amount turns out to be insufficient, the carrier is saying that it will pay the difference. T-Mobile has the advantage because it administers the refunds itself, so it can easily address any reimbursement issues.
As for Sprint and Verizon Wireless, they are paying a combined $158 million settlement. Sprint is paying $50 million to its customers (from a total settlement of $68 million), while the Big Red is paying $7 million to its customers (from a total of $90 million). Like AT&T's, Sprint's and Verizon's settlement has a cap though so it is also possible that its customers may not be fully refunded.
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