AT&T's Paying Users $88 Million After Being Busted for Cramming AT&T is being forced to shell out $88 million in refunds to more than 2.7 million of its wireless subscribers after being busted for actively aiding crammers that were ripping off the company's customers. In an FTC announcement made on Thursday, the agency noted the payout comes after a 2014 settlement with AT&T that found AT&T intentionally made customer bills harder to understand so that it would be easier for several cramming outfits to rip off the company's own customers.

Companies like AT&T get a portion of the proceeds from such scams (in this case 35%), and had a history of looking the other way as a result. Only in the last few years has the government finally decided to take action. According to the FTC, this is the largest customer payout related to a cramming settlement in the history of the agency. With cramming, third-party companies often automatically charge consumers a $10 monthly fee for "premium text messaging," horoscope, or other services they never asked for. Getting the charges to stop is often a headache for consumers. Obviously it's an even bigger headache when your wireless carrier refuses to help because it wants to keep the money flowing its direction. The agency states that their investigation found that at times, user complaints impacted as many as 40% of AT&T subscriptions in a month. The agency notes that in 2011 alone, AT&T received more than 1.3 million calls to its customer service department about the charges. Instead of aiding these bilked users, AT&T actually made it easier than even for crammers to rip them off. Epiq Systems, the refund administrator for the refund program, began mailing refund checks and automatically applying credits to AT&T phone bills starting yesterday. The FTC says that 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 will be $31, says the agency. "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." This isn't the first run in of this type that AT&T has had with federal regulators. The company recently had to pay a $7.75 million fine for helping drug dealers run a directory assistance scam on the company's own fixed-line phone customers. AT&T allowed scammers to charge customers approximately $9 per month for a sham directory assistance service, a scam only discovered after the US Drug Enforcement Administration (DEA) was investigating the scammers for drug-related crimes and money laundering. AT&T has also been fined for letting credit card scammers abuse the IP Relay system for the hearing impaired, because here too AT&T was profitting off of illegal activity. The settlement comes as AT&T tries to convince the public, press and regulators that its $100 billion acquisition of Time Warner will be a The settlement comes as AT&T tries to convince the public, press and regulators that its $100 billion acquisition of Time Warner will be a boon to consumers and that the even larger company can be trusted to treat competitors and consumers fairly.







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Most recommended from 23 comments

microphone

Premium Member

join:2009-04-29

Parkville, MD 17 recommendations microphone Premium Member There should have been jail time Fines are for neglect; this was blatant steeling. Why aren't those responsible behind bars? Body Count

join:2010-09-11

Columbus, OH 12 recommendations Body Count Member Yeah This is why I will not use or even try DirecTV Now service. AT&T as a company is very corrupt. From the monopoly they had in the 70's and 80's... to everything else now. I will not give them one cent of my money.

SuperSpy

join:2012-06-15

Coldwater, MI 3 recommendations SuperSpy Member Another random fine There's no way this fine costs anywhere near the profit they made from this. Which means they learned nothing.

Anon7dfef

@2600:1005.x 3 recommendations Anon7dfef Anon What a shock???? I can't believe at&t would ever do anything illegal. They have an ethics program and even a board of directors. It can't be true.....AGAIN......AGAIN....AGAIN........:) alexintexas

join:2003-01-11

San Antonio, TX 2 recommendations alexintexas Member should of added another 8 or two, and even jail time!