FTC to distribute $88M in refunds to customers impacted by AT&T cramming
The U.S. Federal Trade Commission on Thursday announced plans to mete out some $88 million to more than 2.7 million current and former AT&T customers who were affected by "mobile cramming," a scheme that added unwanted third-party service charges to their monthly phone bills.
Funds for the mass reimbursement originate from settlements with AT&T and the two companies responsible for the scam, Tatto and Acquinity, the FTC said in a statement.
In 2014, the FTC, FCC and Attorneys General from all 50 states and the District of Columbia leveled a joint legal action against AT&T alleging the company profited from a scam that placed unauthorized charges on subscriber bills.
Dubbed mobile cramming, companies like Tatto and Acquinity would send victims premium text messages related to horoscopes, trivia and other unsolicited content. When customers complained, AT&T in many cases refused to offer a refund despite taking 35 percent or more of cramming proceeds.
"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," said FTC Chairwoman Edith Ramirez. "I am pleased that consumers are now being refunded their money and that AT&T has changed its mobile billing practices."
AT&T agreed to settle the case for $105 million in fines, $80 million of which was initially earmarked for refunds. The trade commission is rolling in another $8 million from related actions against Tatto and Acquinity.
Over a six month refund application period the FTC received more than 5 million claims from AT&T customers, some of whom entered multiple submissions. In total, more than 2.7 million people will receive reimbursements averaging $31, the most of any case administered by the agency. The $88 million sum also represents the most money ever returned in a cramming case, the FTC said.
Current AT&T customers impacted by the cramming scheme, and who filed claims with the FTC, will see allotted refunds appear as a credit on their bill within 75 days. Customers who are no longer with AT&T are set to receive a check in the mail, the first round of which was sent out today.
Those interested in learning more about the refund process can visit the FTC's new consumer website.
Funds for the mass reimbursement originate from settlements with AT&T and the two companies responsible for the scam, Tatto and Acquinity, the FTC said in a statement.
In 2014, the FTC, FCC and Attorneys General from all 50 states and the District of Columbia leveled a joint legal action against AT&T alleging the company profited from a scam that placed unauthorized charges on subscriber bills.
Dubbed mobile cramming, companies like Tatto and Acquinity would send victims premium text messages related to horoscopes, trivia and other unsolicited content. When customers complained, AT&T in many cases refused to offer a refund despite taking 35 percent or more of cramming proceeds.
"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," said FTC Chairwoman Edith Ramirez. "I am pleased that consumers are now being refunded their money and that AT&T has changed its mobile billing practices."
AT&T agreed to settle the case for $105 million in fines, $80 million of which was initially earmarked for refunds. The trade commission is rolling in another $8 million from related actions against Tatto and Acquinity.
Over a six month refund application period the FTC received more than 5 million claims from AT&T customers, some of whom entered multiple submissions. In total, more than 2.7 million people will receive reimbursements averaging $31, the most of any case administered by the agency. The $88 million sum also represents the most money ever returned in a cramming case, the FTC said.
Current AT&T customers impacted by the cramming scheme, and who filed claims with the FTC, will see allotted refunds appear as a credit on their bill within 75 days. Customers who are no longer with AT&T are set to receive a check in the mail, the first round of which was sent out today.
Those interested in learning more about the refund process can visit the FTC's new consumer website.
Comments
I know it's been around ever since SMS messaging was a thing, but it only because an exceptionally horrific problem when AT&T Wireless switched to GSM and customers would call in with all these mystery charges that they couldn't explain, (and I'd credit anyway, policy be damned) and then disable the SMS feature of the service as a consequence. It turns out in 100% of the cases, it was kids (or adults) who didn't read the terms and conditions. And who does?
So I hate this scam with a passion and I'm sure customers on every mobile network in the US and Canada have been a victim of it since 2004.