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More than $88 million refunded to victims of mobile cramming

Created date

February 21st, 2017

Back in 2014, “Scam alert” reported on the Federal Trade Commission’s (FTC) complaint against telecommunications giant AT&T. At issue was the company’s tactic of “mobile cramming,” which describes the practice of including unauthorized charges on customers’ bills. 

The FTC says that 2.7 million AT&T customers had third-party charges added to their mobile bills without their consent and those consumers are entitled to a refund. Most of those charges amounted to $9.99, and they were for things such as special ringtones and text message subscriptions for horoscopes or tips for your love life. Some of that money from those erroneous charges went to Tatto and Acquinity. Both of those companies have subsequently been fined and shut down.  

The FTC alleges that AT&T kept at least 35% of those fraudulent charges. 

As part of the settlement, over $88 million will be disbursed to 2.7 million consumers. It is the most money ever returned to consumers in a mobile cramming case. The refund program will credit 2.5 million current AT&T customers, and more than 300,000 former customers will receive checks. Consumers will receive and average of about $31.

‘High volume of complaints’

“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,” says 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.”

A refund administrator, Epiq Systems, began mailing refund checks and applying credits to AT&T phone bills in December 2016. Refunds are being issued to consumers who filed claims for redress with the FTC. If you have questions about the process or believe you may be entitled to a refund, the FTC has a special hotline to answer consumers’ questions about the process (1-877-819-9692).

In the wake of this case, AT&T has also agreed to change its billing process for third-party charges, making it easier for consumers to spot fraudulent or erroneous charges.

Phone bills are notoriously complicated. Frequently itemized with service fees, activation fees, etc., it’s often hard to distinguish between legitimate charges and fraudulent ones. It bears repeating, review your bill each month and pay particular attention to any charges in the “miscellaneous fees” portion of the bill. Be on the lookout for words such as “minimum use fee, activation, member fee, or subscription,” which may red flag services you haven’t authorized. 

To protect yourself from third-party cramming, don’t enter your mobile phone number on unsecured websites. Also, if you start receiving unsolicited text messages, it could be a sign of a scam. Check your phone bill and contact the carrier if anything seems amiss.

If you have been the victim of cramming, you can file a complaint with the FTC by calling 1-877-FTC-HELP (1-877-382-4357).