The Federal Communications Commission and Federal Trade Commission announced today that AT&T will pay a fine of $105 million for unauthorized charges on customer’s bills. The company will pay $80 million to the FTC for refunds, $20 million to the state treasury and $5 million to the FCC.
The FTC stated that AT&T was guilty of overcharging customers and collected “hundreds of millions of dollars” without the customer’s knowledge. The charges were mainly made through ringtones, text messages with love tips, horoscopes and others. They were priced starting from $9.99 per month while some services were as high as $60 per month. The hefty fine is the biggest till date for wireless carriers.
“For too long consumers have been charged on their phone bills for things they did not buy,” said Tom Wheeler, FCC chairman.
Edith Ramirez stated that the company did not stop the charges and made millions of dollars by taking 35 percent of every charge and did not offer refunds to consumers. AT&T had also assured the third-party service providers that customers would not be offered a full refund. The company had used dubious billing methods which the consumer will not be able to differentiate.
The complainant also mentioned that the wireless carrier extends calls by 10 seconds to charge and collect location data which results in millions of overcharges per day. AT&T agreed to pay the fine, but mentioned that it had discontinued third-party charges in December 2013. The company assured FTC that it would obtain permission from consumers for third-party services, remodel its billing system where customers can see the services that they pay for.
Earlier in July, reacting to the T-Mobile’s alleged bogus bill scams, the FTC has asked the consumers to thoroughly check their bills and services mentioned in it like voice mail fees, membership fees, service fees etc. It has also mentioned that the consumers have rights to ask questions to their service providers about any additional service charges on mobile bills.
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