DEA-led investigation leads to $6.8M in refunds, nearly $1M in fines for AT&T tied to bill cramming by ‘unscrupulous’ third parties
AT&T said it will provide $6.8 million in refunds and pay nearly $1 million in fines tied to a Federal Communications Commission investigation into unauthorized third-party billing for the telecom operator’s wireline business.
The FCC claims AT&T allowed “scammers to charge customers approximately $9 per month for a sham directory assistance service” that was uncovered by the U.S. Drug Enforcement Administration, which was investigating a pair of Cleveland-area companies for drug-related crimes and money laundering. The two firms were Discount Directory and Enhanced Telecommunications Services.
As part of the DEA investigation, the companies said they were set up to bill thousands of consumers for a monthly directory assistance service through local AT&T landline phone bills, though they never provided any directory assistance services. The information was passed to the FCC’s Enforcement Bureau in 2015.
The FCC noted AT&T received a fee from the companies for each charge placed on consumer bills, with none of the companies able to show that the AT&T customers agreed to be billed for the services. The $6.8 million in refunds are set for all current and former customers charged for the services since January 2012, with the $950,000 fine going to the U.S. Treasury.
The carrier is also required to stop billing for “nearly all third-party products and services on its wireline bills, adopt processes to obtain express informed consent from customers prior to allowing third-party charges on their phone bills, revise their billing practices to ensure that third-party charges are clearly and conspicuously identified on bills so that customers can see what services they are paying for, and offer a free service for customers to block third-party.”
“A phone bill should not be a tool for drug traffickers, money launderers and other unscrupulous third parties to fleece American consumers,” said FCC Enforcement Bureau Chief Travis LeBlanc, in a statement. “Today’s settlement ensures that AT&T customers who were charged for this sham service will get their money back and that all AT&T consumers will enjoy greater protections against unauthorized charges on their phone bills in the future.”
This is not the first bill-cramming fine levied against AT&T. The FCC in 2014 required the telecom giant to pay $105 million in fines and refunds tied to unauthorized third-party subscriptions and premium text messaging services charged to AT&T Mobility customers.
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