AT&T Is Paying $7.75 Million in Refunds and Fines Over Sham Calls (fortune.com)

AT&T will pay $7.75 million after a federal investigation found it allowed unauthorized third-party charges on its customers' telephone bills, the U.S. Federal Communications Commission said Monday, reports Reuters (via Fortune). From the report: The company allowed "scammers to charge customers approximately $9 per month for a sham directory assistance service," the FCC said Monday. The fraud was uncovered by the U.S. Drug Enforcement Administration while investigating two Ohio companies for drug-related crimes and money laundering, the FCC said. The settlement includes $6.8 million in refunds and a $950,000 federal fine, the FCC said. AT&T signed a consent decree with the FCC and agreed to cease billing for nearly all third-party products and services on landline bills and adopt procedures to obtain express consent from customers prior to allowing third-party charges. The company also agreed to revise its billing practices to ensure third-party charges are conspicuously identified on bills.

Comments

Only took em 30 years to get caught...

[Anonymous Coward]

...committing blatant & obvious fraud on a nationwide level.

The law never sleeps!

Tricks of the Mouth

[Tablizer]

We've had the experience whereby we order a new service or discount program. The AT&T "operator" starts talking fast and rattling off obscure names and words. When we ask for clarification, the operator just changes the subject, or says, "one second, let me check on something". Then a month and a half later, strange fees start showing up on our bill. After giving us the transfer run-around, we finally ask to have the fees removed. The "operator" says, "Sorry, they must have gotten there by accident".

I suspect these "operators" get a cut of any add-on service they sell, and thus have an incentive to stick you with a service using well-honed tricks of the mouth. In case the conversation is recorded, they have their "sloppy talk" as an excuse. In the end, it's "just a misunderstanding".

Why are all their "misunderstandings" in THEIR favor and not ours?

If there truly is a hell, these "operators" will roast crispy and crunchy (along with the managers who know about it and do nothing).

Re:Tricks of the Mouth

[TroII]

When we ask for clarification, the operator just changes the subject, or says, "one second, let me check on something". Then a month and a half later, strange fees start showing up on our bill.

One scam I've encountered before, and I'm not saying AT&T does this but other companies do, is they'll record your entire phone call. When they say "one second, let me check on something" and you reply with something like "that's fine," now they have a recording of you saying "that's fine." If you challenge the charges later on, they dig up the recorded phone call and someone spends a couple minutes stitching it together so it sounds like you said "that's fine" after they asked "Would you like to order $EXPENSIVE_SERVICE?"

I'm very leery of saying any affirmative phrases ("OK", "yes," "sure") over the phone unless I initiated the call or I know the other party.

Sham legal justice

[swb]

If you and I did this through some business we owned, we would be charged with a dozen felonies. The prosecutor would have a field day over the fact that we obscured the nature of the charges to make it look like our legitimate business charges and did nothing to guarantee the charges were legitimate. Bottom line, we would go to jail.

AT&T? A fine so small that it is a rounding error on their SEC filings. And certainly not a hint of any criminal prosecution.

This is sham justice. AT&T should have been fined 10x the gross revenue they received from this little scam. The executives in charge of managing this scam should have been jailed for fraud, possibly even as co-conspirators in whatever drug investigation caused the DEA to find this operation.

They could have sent a message that said if you want to skim the cream with your billing operation, great, but make sure the billing is 100% legitimate or you will be held accountable for fraud.

What the hell

[rsilvergun]

I've got karma to burn, so I'll point out that this is the inevitable result of our misguide attacks on gov't and "Bureaucracy" (which work since we all hate the DMV). America never seems to cut down on the pork and waste going to the top but we do a fine job cutting back on enforcement. Then we all sit around /. and complain that AT&T made 20x profit on a piddly fine and that they'll do it again.

Whenever somebody tells you "Gov't's not the solution, it's the problem" check their credentials. They probably hail from a right wing think tank funded by a billionaire.