Federal Trade Commission (FTC) to Provide More Than $88 Million in Refunds to AT&T Mobile Cramming Customers
Image: AT&T

Federal Trade Commission (FTC) to Provide More Than $88 Million in Refunds to AT&T Mobile Cramming Customers

More than 2.7 million customers will be refunded, mostly through bill credits

December 8, 2016

The Federal Trade Commission (FTC) will provide more than $88 million in refunds to more than 2.7 million AT&T customers subjected to "mobile cramming," a tactic in which third-party charges were added to customers' mobile bills without their authorization.

The refunds related to settlements made with AT&T in 2014, as well as with Tatto and Acquinity, the companies behind two of the cramming schemes.

The amount of these refunds is the most money that has ever been returned to customers in a case about mobile cramming. The FTC's refund program will provide almost 2.5 million current AT&T customers with a credit on their bill within the next 75 days, and more than 300,000 former customers will get a check. The average amount of the refund 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."

The FTC's complaint alleged that AT&T put unauthorized third-party charges on the phone bills of its customers, usually in the amount of $9.99 per month, for ringtones and subscriptions via text messages that contained love tips, horoscopes, and so-called "fun facts." According to the FTC, the company kept at least 35 percent of these charges.

Under the terms of the settlement, which also included all 50 states, the District of Columbia, and the Federal Communications Commission (FCC), AT&T agreed to pay $80 million in refunds and inform current customers who were charged without their consent. In addition, it also made significant changes in its third-party billing process.

The refund program's refund administrator, Epiq Systems, will start to mail refund checks and to apply credits to the phone bills of affected customers beginning today. The refunds are being issued in the wake of consumers filing their redress claims with the FTC after a claim registration confirmation and audit process. If the checks are not cashed within 60 days, they will become void.