The Federal Trade Commission is providing over $88 million in refunds to more than 2.7 million AT&T customers who had third-party charges added to their mobile bills without their consent, a tactic known as “mobile cramming.” The refunds to consumers relate to 2014 settlements with AT&T, and the companies behind two of the cramming schemes, Tatto and Acquinity.
The refunds represent the most money ever returned to consumers in a mobile cramming case. Through the FTC’s refund program, nearly 2.5 million current AT&T customers will receive a credit on their bill within the next 75 days, and more than 300,000 former customers will receive a check. The average refund amount is $31.
“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.”
According to the FTC’s complaint, AT&T placed unauthorized third-party charges on its customers’ phone bills, usually in amounts of $9.99 per month, for ringtones and text message subscriptions containing love tips, horoscopes, and “fun facts.” The FTC alleged that AT&T kept at least 35 percent of the charges it imposed on its customers.
As part of the settlement, which also involved all 50 states and the District of Columbia, as well as the Federal Communications Commission, AT&T agreed to pay $80 million for refunds and notify current customers who were billed for unauthorized third-party charges of the refund program. Under the settlement, the company also significantly changed its process for third-party billing.
Epiq Systems, the refund administrator for the refund program, will begin mailing refund checks and applying credits to AT&T phone bills starting today. Refunds are being issued in the wake of consumers filing their claims for redress with the FTC, and following a claim registration confirmation and audit process. The checks must be cashed within 60 days or they will become void.