AT&T slapped with $105 million settlement for "cramming" bills with fake charges

WASHINGTON, Oct. 8 (UPI) -- It's not your imagination, AT&T customers: Your bill really was higher than it should have been, and now the telecom will have to pay you back.

The Federal Trade Commission Wednesday slapped AT&T Mobility, LLC, with the bill in a $105 million settlement for mobile cramming -- charging customers for third-party subscriptions or services they never ordered or authorized.

Most of the settlement -- $80 million -- will be paid to the FTC to settle consumer refunds. Another $20 million in penalties and fees will be decided among all 50 states and the District of Columbia, and $5 million will be paid to the FTC.

AT&T made the extra charges difficult for customers to spot: Usually no more than $9.99 a month, the wireless company listed the charges among a lump "AT&T Monthly Subscriptions," duping customers into believing the charges were legitimate.

Some charges came when third-party companies randomly picked phone numbers to sign up for ringtones or texts without consent, or would offer gift cards or entrance into contests, asking mobile users to text back, and then began charging for recurring fees.

"This case underscores the important fact that basic consumer protections -- including that consumers should not be billed for charges they did not authorize -- are fully applicable in the mobile environment," Edith Ramirez, the FTC chairwoman, said in a statement.

AT&T said in its own statement that it had ceased charging customers for those types of fees in December.

"While we had rigorous protections in place to guard consumers against unauthorized billing from these companies, last year we discontinued third-party billing for Premium Short Messaging Services," the company said in a statement. "This settlement gives our customers who believe they were wrongfully billed for P.S.M.S. services the ability to get a refund."

Wednesday's settlement is the largest yet levied against mobile phone companies for cramming. The FTC filed a similar case against T-Mobile in July, but the company is contesting the charges, claiming that the third-party providers should take the blame.

The FTC has also filed five cases against those content providers.

Eligible customers have until May 1, 2015 to apply for a refund.