AT&T will be providing refunds to customers who were billed for unauthorized monthly subscriptions from third-party companies, otherwise known as 'cramming.'
As part of a $105 million settlement with state and federal authorities, AT&T will pay $80 million to the Federal Trade Commission (FTC) to provide customer refunds, $20 million in penalties and fees to all 50 states and Washington, D.C., and a $5 million penalty to the Federal Communications Commission.
About 713,000 North Carolina customers could be eligible for refunds under the settlement.
According to a complaint filed by the FTC, AT&T billed customers for monthly subscriptions services on behalf of outside companies and kept 35 percent of the charges.
The subscriptions, often for ringtones and text messages containing love tips, horoscopes and fun facts, were billed to customers without their consent. Many of these services cost about $9.99 per month and were listed in such a way that customers thought the charges were part of their AT&T service.
Online bills only listed the total amount due without explanation as to what the charges were. On printed bills, the charges were listed as AT&T Monthly Subscriptions, leading many customers to believe the services were part of their plans.
Customer complaints mounted, however, and AT&T changed its refund policy from agreeing to refund three months' worth of charges, to two. Many times, the company declined the refunds outright and referred customers to the third-party company.
In 2011, the company received more than 1.3 million calls to its customer service department about the charges.
Under the terms of the settlement, AT&T must notify all of its current customers who were billed for these charges of the settlement and the refund program. Former customers may be contacted by the FTC's refund administrator.
AT&T is also required to obtain consumers' express, informed consent before placing any third-party charges on their mobile phone bills. In addition, the company must clearly indicate any third-party charges on billing statements and provide consumers with the option to block third-party charges from being placed on their bill.
Beginning today, consumers who believe they were charged by AT&T without their authorization can visit ftc.gov/att to submit a refund claim and find out more about the FTC's refund program under the settlement. If consumers are unsure about whether they are eligible for a refund, they can visit the claims website or contact the settlement administrator at 1-877-819-9692 for more information.
Editor's Note: This story was updated on Oct. 9 with additional information.