U.S. wireless carrier AT&T is set to give back more than $88 million in refunds to customers who had unauthorized third-party charges added to their mobile bills, the Federal Trade Commission saidThursday.
The Commission said the award represented the most money ever returned to customers in a mobile cramming case to date.
The FTC indicated the refunds are related to 2014 settlements with AT&T and the companies behind two mobile cramming schemes, Tatto and Acquinity. According to the FTC’s complaint in the matter, AT&T levied third-party charges – usually amounting to around $10 per month – for ringtones and text message subscriptions on customer accounts without their knowledge. The FTC alleged AT&T kept at least 35 percent of the fraudulent charges.
According to the FTC, the refunds will go to some 2.7 million AT&T customers across all 50 states. The Commission said 2.5 million individuals getting refunds are current AT&T customers who will receive a bill credit within the next 75 days, while an additional 300,000 plus former customers will receive a check in the mail.
The average refund is expected to amount to around $31, the FTC said
As part of the settlement, the FTC said AT&T has also made changes to improve its third-party billing practices.
“AT&T received a high volume of complaints related to mobile cramming prior to the FTC and other federal and state agencies stepping in on consumers’ behalf,” FTC Chairwoman Edith Ramirez said in a statement. “I am pleased that consumers are now being refunded their money and that AT&T has changed its mobile billing practices.”
While the refunds from AT&T may set a new record, this certainly isn’t the only major cramming case in recent history involving a major U.S. wireless carrier.
Just after the AT&T settlement, T-Mobile in December 2014 agreed to settle a cramming case with the FTC for $90 million.
And back in May 2015, the FCC announced Tier-1 carriers Verizon and Sprint had agreed to pay settlements of $90 million and $68 million, respectively, to settle investigations that revealed the companies billed customers for millions of dollars worth of unauthorized third-party text subscriptions. As in the AT&T case, the FCC said the average charges amounted to just under $10 per month, and said the carriers retained 30 percent or more of the unauthorized charges.
Filed Under: Industry regulations