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Can You Claim Part of the $80 Million AT&T ‘Cramming’ Settlement?

Oct. 9, 2014
Personal Finance
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If you’re an AT&T cellphone customer and you’ve had bogus charges on your bill, the company’s $105 million settlement with regulators is good news.

The Federal Trade Commission will get $80 million of that payout – the FTC’s largest mobile “cramming” settlement against a single carrier to date – to pay customer refunds for unauthorized premium short message service (PSMS) charges, according to the agency.

“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,” says Edith Ramirez, the FTC chairwoman. The agency says AT&T agreed to cough up another $25 million in penalties and fees.

If you’re an AT&T customer wondering if you deserve a refund, here are some questions to ask:

Were you ever charged for services you didn’t order?

AT&T, with almost 117 million wireless customers, improperly billed people for things like cellphone wallpapers, daily horoscopes or ringtones, listing them as “AT&T monthly subscriptions,” according to the FTC’s complaint. This practice of deceitful billing is called mobile cramming. Although AT&T stopped applying the charges last year, bills from at least 2009 to 2013 could have included these fees, usually about $10 a month. The federal agency says the billing method led many consumers to believe they were paying for AT&T services – not those provided by third parties that they didn’t order.

“Although these unauthorized charges were made by other companies, we take seriously claims that charges on our customers’ bills were not accurate,” Mark Siegel, an AT&T spokesman, said by email.

The FTC’s complaint says the company wasn’t completely uninvolved, however. It says AT&T pocketed 35% of those unauthorized charges, amounting to $108 million in 2012 and $161 million last year.

Did you receive services you didn’t ask for?

If you’re a current or former AT&T customer and received a service – such as daily text messages with love tips or “fun facts” – but you don’t remember signing up for it, check your phone bill for mystery charges. Through PSMS, third parties don’t need your credit card number to scam you; they just need your phone number. That means that anyone – no matter how careful – can be affected.

Were you turned down for refunds previously?

Most of the unauthorized third-party charges were small and recurring and went unnoticed by consumers. Those who did notice, however, weren’t always able to secure a full refund.

Though AT&T used to offer a three-month refund for customers who complained, they changed it to two months after October 2011, according to the FTC. The agency says there were more than a few complaints. That year alone, the company received 1.3 million calls from customers regarding the fees, the regulator says. At times, it says, there were complaints about 40% of third-party charges. Those who weren’t able to get all their money back then will now be able to receive full refunds.

If you have service from another mobile carrier, check your bills for these sneaky charges. The FTC went after T-Mobile in July over mobile cramming, after taking action against five other companies last year.

What to do next

If you had improper charges on your AT&T bill from January 2009 on, you can apply for a refund by filling out this form before May 1. Be prepared to provide basic information about yourself and your AT&T account.

Don’t expect a quick pay off, though. The FTC says refunds will take a minimum of nine months to process.

Cellphone bill photo via Shutterstock.