AT&T gets $105 million wake-up call about mobile cramming

Share This Page

We’re not saying it’s the most important phone message since “Mr. Watson, come here. I want to see you.” But the FTC hopes a $105 million settlement with AT&T Mobility stemming from unauthorized charges on consumers’ mobile phone bills will motivate industry members to listen up.

The AT&T case is the latest salvo in the battle against mobile cramming. It’s part of a united front forged by the FTC, the FCC, and a coalition of 51 state Attorneys General.

According to the FTC’s complaint, companies signed consumers up without their express consent for text message services offering trivia, ringtones, flirting tips, celebrity gossip, and the like. Industry insiders refer to them as Premium SMS charges, but thousands of consumers called the monthly $9.99 fees unapproved, unauthorized, and flat-out annoying. AT&T wasn’t the one serving up the flirting advice, but it billed consumers for the services and pocketed a cool 35-40% of the take.

What’s more, the FTC complaint alleges that AT&T took steps to keep consumers in the dark about what was going on, making it tough for them to challenge the unauthorized charges. The company’s bills clearly listed the bottom-line total supposedly owed each month, but consumers were hard-pressed to locate and identify the unapproved fees. For example, hard copies of bills hid them in a category called “AT&T Monthly Subscriptions,” despite the fact that the charges were placed by third-party content providers.

Even if consumers were able to decipher their bills, the FTC says AT&T looked the other way as complaints mounted. In 2011 alone, the company got over 1.3 million calls to its customer service department complaining about third-party subscription charges. And it wasn’t just consumers clamoring for the company to cut out the cramming. The lawsuit cites an in-house email in which an employee stated that “Cramming/Spamming has increased to a new level that cannot be tolerated from an AT&T or industry perspective.” But tolerate it AT&T did, even as industry auditor alerts, law enforcement agencies, and others joined consumers in urging the company to rethink the role it was playing in the unauthorized – and illegal – charges.

The FTC says AT&T compounded the harm to consumers by setting up roadblocks to refunds. When people complained, AT&T told some of them there was nothing it could do. In other cases, AT&T put the onus on consumers, telling them to take it up with the third party sending the unwanted content. But good luck with that, given that in many instances, AT&T failed to give people accurate information on how to reach them. Others were offered a take-it-or-leave it token refund of two months of charges even though AT&T had billed them for a year or more.

All the while, AT&T continued to pocket its hefty percentage even from content providers that racked up astronomically high complaint and refund numbers. One telling comparison, according to the FTC: how AT&T rebuffed consumers who tried to get refunds vs. how the company bent over backwards to maintain lucrative business relationships with crammers through an ineffective “three strikes” policy.

The complaint alleges that AT&T’s billing practices were deceptive and unfair. The settlement requires AT&T to ensure from here on in that consumers give their consent before being billed for third-party charges. When consumers contact AT&T about unauthorized third-party charges, the company will have to provide a refund unless it can show the consumer consented to the charge in the first place. What about telling people to hunt down the third-party subscription services on their own to get a refund? That practice has to stop. AT&T also has agreed to continue to offer consumers the option to block all third-party charges.

Of the $105 million total financial settlement, $80 million will go to the FTC to use for consumer refunds, $20 million will be paid in penalties and fees to the state AGs, and $5 million will go in penalties to the FCC. For current customers billed for unauthorized third-party charges, AT&T must notify them of the settlement and refund program by text, email, paper bill insert, and notification on an online bill. Former customers may be contacted by the FTC’s refund administrator. Consumers can visit the FTC's refund page for more information.

What’s the message for other marketers?

First, consumers shouldn’t need Sudoku-like skills to figure out their bills. It’s a basic principle of customer service – oh, yeah, and it’s the law – that a business needs to explain what consumers owe in a truthful fashion. A related tenet we’ve repeated so often we should design a macro by now: It’s illegal to bill people without their express consent.

Second, the FTC looks carefully at how companies respond when consumers come forward with a legitimate beef. People shouldn’t have to jump through hoops to vindicate their rights. If you haven’t taken a look at your procedures recently, maybe now is the time.

 

Comments

Please let me settle.

at&t user for 15 yrs or more.

Thank you, so much. It's so aggravating to try to deal with extra charges & not get answers. It's wasted time that could be better spent.

Does anyone know what the refund amount will be?

need to know how to join lawsuit against AT&T

There are no refunds, the online claim system does not work. Who can levy a fine against the FTC for false advertising? More governmental incompetence.

I cannot get on the online claim form site, even though it says today (5/2/2015) is the last day. What liars!

Well I just learned about this claims n already the deadline is over , Why weren't the customers notified by mail or sent with our bills. I have been a AT&T customer for over 8 yrs so iam very disappoineted that they did this to there loyal customers . I could go to a different cell company maybe they will be honest with there customer instead of filling the big guys pockets . Well that's how I feel iam very upset about this claim that iam not able t file :(

it was in the newspaper

Can the deadline be extend, please? Just found out about this today and didn't realize the deadline had or is about to past. I call the 1-877-819-9692 number it says today is the last day for the claims, but I can't get through to an operator, it's just a recording that hangs up after the message. The online application link isn't working and it's past the 1st of May to mail any forms in. Please extend the deadline or make it more well know if you plan to have the window of filing a claim so short. Thank you.

If what AT&T did was ILLEGAL, then criminal charges should be filed, in addition to a civil lawsuit and penalties.

In a recent TV news interview, a guest pointed out that companies pay big fines and settlements, but it's the shareholders who end up with the bill. In the case of AT&T, isn't it also the consumers who ultimately pay the fines?

If corrupt corporate management isn't prosecuted, and large corporations just write off the costs, nothing really changes. If dishonest executives who knowingly scam consumers are prosecuted, others will take notice and think twice about doing the same thing.

So what can we do now that its past the deadline? I was just made aware.
Side note: FTC said "beef" I about fell off the chair lol

When will we receive the settlement

What date will checks be mailed?

How do you sign up for this. I think I may already have but not sure. How can I find out.

call the ftc and they will help you

It has been 12 months since my claim was submitted. how will I know I have received a settlement?

good question.. it has been a year for me and wee should get interest and a lot more for the aggravation

I did file an online claim submission form back in December 2014.....if we are eligible for a refund when can we expect for it to be processed?

Hope they keep charging them for everything they continue to do wrong until they put them out of business. They should have been out of business a long long long time ago!!!

Last Sat I added my gf to my AT&T plan. It wasn't a smartphone, it was paid for upfront so it's an additional $20/mth on my plan. After we got home I checked my account online. The new phone was listed at $20 plus $9.95/mth for insurance. I immediately had the insurance removed. It seems AT&T hasn't learned an f*****g thing!

I am getting 400 dollar phone bills monthly from AT&T it is out of control. Brought 6 MG's and they are charging me to buy more Meg a bites before the month is over and I am using wifi. Need assistance.

Has any one received their checks yet? And if so did it say from AT&T on the envelope or check?

Hi, Catch22. The deadline for consumers to file claims was May 1, 2015. Processing of all those claims is still underway and then there is an independent audit. (That's standard in matters like this.) So it looks like the final status of claims won’t be known until Spring 2016. We realize it's a long process and appreciate your patience.

it has been a long time since I filed my claim. If I owed that much money for this long I would not have phone service. Not fair

We had to pay our bills on time but we have been waiting over a year for the refunds. Is that fair?

Any idea when we will get a refund?

Thank you for your patience, dawnwooten14. The review of all the applications is still in progress, but we think eligible consumers should be getting checks soon. As you can imagine, it's one of the biggest cases of its kind and we need to be careful that refunds get to the right people.

Unfortunately, this may be one of the "biggest cases of its kind" but the net effect on AT&T will be ZERO. AT&T just raised my rate by $5 per month after a similar increase last year. It appears they are going to get away with making me pay for my own "refund."

I had been initially hopeful that the FTC would indeed penalize AT&T, but in the end, it is me, the lowly consumer who pays the price....again.

I've been with Att for 10 years. They are all the time charging me with nonsense. I have to call them every month!! It's ridiculous! I upgraded 2 years ago and I paid for the device by a visiual voicemail charge
$20 a month when I was suppose to be getting my device at a discount for upgrading and signing another contract for2more years. As soon as my device wasn't under a contract any more my phone just quit working. How convenient AT&T. No telling how much overage I've paid on my data!!i I have 6 Devices in our home and all of them have mysteriously been knocked off wifi resulting in overage charges! $15 for 1 GB a pop! AT&T needs to composite! Nothing but a scam and they hope we ignore them mysterious charges!!

What do you do if they apply credits as compensation for a known issue you've had with them for months without your knowledge or consent even if you've told everyone you spoke with that you don't want credits applied and they do it anyway. I can prove it because I record every call I have with AT&T because all they do is lie and apologize and tell you what they can't do for you!

I'm part of the ATT case want to know if they have settled and are sending refunds? I have a tracking # [deleted].

Any help in this matter would be greatly appreciated!

The process of going through all the refund applications is still underway, Stoney47. It's important to us -- and to you, of course -- that the money goes to the consumers who are owed a refund. It's a lot of paperwork to confirm, so we really appreciate your patience.

It is now 6/3/2016 and we are now past the statement Final statuses of claims won’t be known until the Spring of 2016?? Is this truly going to happen?

When can we expect the refund? Any idea of a ballpark figure of how much the refund will be?

OK...its the Spring of 2016...when will people start knowing something?

Now the date has been moved back to the Summer of 2016?? I have a question...the lawyer and person who began the lawsuit got their money, wiith the money that is left after all the refund amounts are figured out, do they split that extra money among all those involved??

The FTC has absconded with the $105 million. You suckers.

How do I receive my settlement when I'm threw another carrier my tracking # has been appointed to

FTC, this settlement was a total failure.

People who were fraudulently billed hundreds of dollars are getting pennies, and AT&T continues multiple forms of billing fraud amounting to Billions each year.

How can you approve a settlement that fails to return all of the money stolen from these individuals?

These settlements need to be in the Billions. This is fraud and theft, how about putting some people in Jail!

Ain't it funny. The FTC, has taken the $ 105 million and paid it to themselves so they can stay in business.
1000 clones.

when do refunds go out. havent receved refund yet

I've been scammed by ATT since they bought out SWBell... I aubmitted all my info for SEVERAL lines on my account since 2009 (the date given to me by this lawsuit), I got my first text from ATT in Jan. 2014 saying "refunds are available" and then another one on Jan. 2015 and the last one on Feb 2015. Now that the lawsuit is settled, how do I get my refunds? And with several phone#s over a period of 5+years at $9.99 charge per month.... my refund amount better be a great deal larger than the "average" $31 per consumer!

Got my ATT bill with a credit described as: Content Purchase Credit. This was confusing. I make no content purchases that would appear on my bill, which is why I complained to ATT about unauthorized charges years ago and registered my complaint with the FTC.

While initially I was happy to get some money back, I am disappointed that ATT was allowed to call the refund a "Content Purchase Credit". This implies I had made a content purchase, which is NOT TRUE. ATT engaged a lucrative partnership with fraudsters and maintained that relationship in spite of hearing from its customers that they had NOT made the purchases that ATT billed on behalf of the fraudsters. This should have been called "Credit for Unauthorized Charges" or "FTC Settlement Credit" or something ACCURATE.

The other reason I am not really very happy about this "credit" is that after paying the same amount for many years, my bill went up $5 per month last year. I had no problem with that. But I recently received notice that it is going up by $5 per month AGAIN, which makes me wonder if these bill increases are actually just a ruse that ATT is using to make me pay for my own refund. With ATT allowed to mislabel the credit for its wrongdoing, and then immediately raise prices to cover the cost of issuing the credit, the FTC has not actually succeeded in penalizing ATT at all.

The net impact is that in spite of the FTC action, I feel that I am not actually being compensated for the unauthorized charges that ATT wrongly billed me for. This all seems like a publicity stunt and a way for lawyers to make more money instead of an action that benefits consumers. It doesn't appear to have any long term impact on ATT's bottom line.

AT&T will not let you unlock a phone after 2 year contract and account paid in full, After 4.5 hours on phone they said nothing they can do and deactivated my phone this is crime against senior citizens, contact your attorney general office and file complaints. I’m 65 years old and now have no phone are emergency service thanks to att.
Captain Richard Beaugh

viagra strength
https://viaonlinebuy.us/# - how to buy viagra online
how do you make viagra

Pages

Add new comment

Comment Policy

Privacy Act Statement

It is your choice whether to submit a comment. If you do, you must create a user name, or we will not post your comment. The Federal Trade Commission Act authorizes this information collection for purposes of managing online comments. Comments and user names are part of the Federal Trade Commission’s (FTC) public records system (PDF), and user names also are part of the FTC’s computer user records system (PDF). We may routinely use these records as described in the FTC’s Privacy Act system notices. For more information on how the FTC handles information that we collect, please read our privacy policy.