AT&T agrees to $105 million settlement with FTC over mobile ‘cramming’ allegations
US wireless carrier AT&T has agreed to a $105 million settlement with the Federal Trade Commission (FTC) over allegations of mobile 'cramming' --- a deceitful billing practice under which subscribers are charged fees for third- party services which they did not order.
The $105 million settlement which AT&T has worked out with the FTC marks the biggest mobile 'cramming' settlement by one single carrier thus far.
Out of the mentioned settlement amount, the FTC will get $80 million for paying refunds to customers for unauthorized premium short message service (PSMS) charges. The remaining amount of $25 million will be paid by AT&T in penalties and fees.
The $105 million fine which AT&T has agreed to pay to the FTC will settle the regulators' allegations that the carrier - which has nearly 117 million wireless customers - has deceitfully charged its customers for services listed as 'AT&T monthly subscriptions.'
These services, which the customers had not ordered, included things like cellphone wallpapers, ringtones, and daily horoscopes; for which the customers were usually charged $10 per month. Despite the fact that AT&T stopped applying the charges last year, these fees were apparently included in bills from at least 2009 to 2013.
In reference to AT&T's mobile 'cramming' practice, FTC Chairwoman Edith Ramirez said: "This case underscores the important fact that basic consumer protections - including that consumers should not be billed for charges they did not authorize - are fully applicable in the mobile environment."
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