AT&T Starts Paying Out $88M In Refunds For 'Cramming'

The Federal Trade Commission (FTC) has revealed that around 2.7 million AT&T customers have started receiving refunds totaling a whopping $88 million as part of a settlement between the regulator and the carrier that was agreed to by both parties back in 2014. The refunds are on account of an illegal scheme known as ‘cramming’ through which, AT&T customers were illegally billed for unwanted services such as ringtones, horoscopes, love advice and special text messages. The original settlement was a massive $105 million, out of which $17 million will go towards paying off various state and federal fines. These services were offered by a couple of third parties called Tatto and Acquinity, and cost up to $9.99 per month (plus taxes) for the frivolous and unsolicited services.

Starting on Thursday, AT&T began paying out the money to all the victims of the illegal practice, around 2.5 million of whom are still with the carrier. A further 300,000, who have since ended their relationship with AT&T, will receive their refunds via checks. According to the FCC, the average refund amount per customer is $31, and in case of the current subscribers, they can expect to see their bills credited within the next 75 days. The regulator has also provided a telephone number (1-877-819-9692) that people may call to receive more information about the case, which was started back in August of 2014 by the FTC (Federal Trade Commission), seeking to obtain “temporary, preliminary and permanent injunctive relief” against AT&T’s unethical and indeed, illegal business practice.

Sadly, though, AT&T is not the only carrier in the country to have indulged in this unsavory practice. The FCC and other investigating agencies had earlier found Verizon and Sprint guilty of cramming, and they were asked to pay $90 million and $68 million respectively to settle the case. At least $120 million out of the combined amount will reportedly go towards reimbursing consumers who have been fraudulently overcharged by the two carriers over the years. Last year, T-Mobile was also found guilty of the same misconduct and was asked to pay $90 million by the FCC, the FTC and the state Attorneys General, when their investigations revealed the carrier’s involvement in the exact same unfair and illegal billing practices.

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Kishalaya Kundu

Senior Staff Writer
I've always been a tech buff and have been building my own PCs since as far back as I can remember. My first computer was a home-built desktop running MS-DOS on which I learnt to program in GW-BASIC and my interests apart from technology include automobiles and sports.