advertisement
advertisement

AT&T Will Pay $105 Million For Deceptive Billing Practice

Of that settlement, $80 million will be returned to customers.

AT&T Will Pay $105 Million For Deceptive Billing Practice
[Photo: Flickr user Patrick Cain]
advertisement
advertisement

AT&T will pay $105 million to settle a federal investigation into claims it billed customers “millions of dollars” for add-on services without their consent, a practice called “cramming.”

advertisement

Of the $105 million settlement, AT&T will pay $25 million in penalties and the remaining $80 million will be refunded to customers.

Though AT&T said it stopped billing customers for unauthorized charges last December, cramming is a common practice mobile phone operators use to boost revenues–and something the U.S. government is cracking down on. In July, the Federal Trade Commission filed a lawsuit against T-Mobile for fraudulently billing customers for premium text-message subscriptions, such as horoscope information or celebrity gossip. T-Mobile said it ended the practice in 2013.

The investigation involving the FTC and Federal Communications Commission cited customer complaints that AT&T refused to issue full refunds. In many instances, the wireless operator only returned one to two months worth of charges. Unknowing subscribers had an additional $10 a month tacked on to their phone bills for various subscriptions, including for ringtones, wallpapers, horoscopes, flirting tips, and celebrity gossip.

advertisement

About the author

Based in San Francisco, Alice Truong is Fast Company's West Coast correspondent. She previously reported in Chicago, Washington D.C., New York and most recently Hong Kong, where she (left her heart and) worked as a reporter for the Wall Street Journal

More