AT&T to Shell Out US$105 million Billing Customers with Authorization

Telecom giant AT&T has agreed to shell out US$105 million towards the settlement of claims about allowing third-party companies to charge its subscribers. These charges to subscribers amount to millions of dollars and the companies billing subscribers were not authorized to do so. The announcement came from state and federal law enforcement officials this week.

According to officials of the Federal Trade Commission and Federal Communications Commission, the telecom major charged its subscribers several millions of dollars as bills from external companies. According to federal officials, subscribers were charged for services such as ringtone subscriptions (typically costing US$9.99 per month), and about 35% of this fee was pocketed by AT&T.

As per the judgment passed by federal and state agency, AT&T will now be required to offer refunds to customers who were billed for the unauthorized charges. The company has been asked to pay US$80 million for such charges. In addition, states that were a part of the settlement will also be paid US$20 million by AT&T towards settlement charges. In addition, the company will shell out settlement charges to the tune of US$ 5 million to the federal government.

According to the truth-in-billing rules laid down by the FCC, telecom companies are required to provide transparency about which services are being charged to consumers. These figures have to feature in the companies’ monthly statements.

According to the chairman of FTC, Edith Ramirez, the settlement of the lawsuit against AT&T reiterates the point that it is unlawful for companies to charge consumers for products or services that they have not authorized. This applies across various formats such as brick-and-mortar stores, mobile shopping as well as online shopping.

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