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AT&T To Cough Up $88 Million For 'Cramming' Mobile Customer Bills (networkworld.com)

Posted by BeauHD on from the money-back-guaranteed dept.

An anonymous reader quotes a report from Network World: Some 2.7 million ATT customers will share $88 million in compensation for having had unauthorized third-party charges added to their mobile bills, the Federal Trade Commission announced this morning. The latest shot in the federal government's years-long battle against such abuses, these refunds will represent the most money ever recouped by victims of what is known as "mobile cramming," according to the FTC. From an FTC press release: "Through the FTC's refund program, nearly 2.5 million current ATT customers will receive a credit on their bill within the next 75 days, and more than 300,000 former customers will receive a check. The average refund amount is $31. [...] According to the FTC's complaint, ATT placed unauthorized third-party charges on its customers' phone bills, usually in amounts of $9.99 per month, for ringtones and text message subscriptions containing love tips, horoscopes, and 'fun facts.' The FTC alleged that ATT kept at least 35 percent of the charges it imposed on its customers." The matter with ATT was originally made public in 2014 and also involved two companies that actually applied the unauthorized charges, Tatto and Acquinity.

9 of 37 comments (clear)

  1. Why is nobody going to jail? by lbates_35476 · · Score: 4, Insightful

    A refund is nice, but until people go to jail for committing this fraud these big companies are going to just keep doing this to us. Companies don't commit crimes like these, people do.

    1. Re:Why is nobody going to jail? by frovingslosh · · Score: 3, Insightful

      Just a little piece of the action for the government and AT&T gets away with pretty much anything. No real punishment and there will be different ways to cheat the customers next year. Nothing new here.

      --
      I'm an American. I love this country and the freedoms that we used to have.
  2. Theft by another name.. by Daemonik · · Score: 3, Interesting

    When will we start cracking down and throwing some CEO's in prison for theft for these sorts of practices? Instead they get to walk away with a declaration of no guilt, write off the payback and go on about their business: figuring out the next scam.

    1. Re:Theft by another name.. by SuricouRaven · · Score: 2

      He does make a good point though. Holding the corporation liable for outright criminal action, but not the individuals who actually give the order, means there is little reason not to take the risk and break the law. If the executive doesn't get caught, they make a ton of money for the company and can enjoy the resulting bonuses and personal wealth. If they do get caught, no big deal - the company pays a fine (which is often less than the money gained by the criminal action) and they carry on working.

      It also creates the sort of class difference that fuels resentment: The lower-income groups see how easily those with wealth and corporate connections can get away with actions that the ordinary person would be jailed for, and this leads to a lot of "fight the corporations!" and "We are the ninety-nine percent!" protests.

      I am not sure quite what the solution for this is, but the current approach is far from ideal.

  3. It must be nice... by fuzzyfuzzyfungus · · Score: 3, Interesting

    It must be pretty cool to be in a position where you can commit fraud against ~2.8million people, sit on the proceeds for several years; and then settle the whole matter for 'compensation' that, at worst, might wipe out your original profits on the fraud.

    Not quite as good as impunity; but perhaps an even better mockery of the perception of 'justice', since the whole process gets to play out as a pitiful farce, rather than just being ignored.

    Incidentally, why is it that, given the American propensity for a good spree killing, you never hear about unpleasant things happening to the people behind schemes like this? Occasionally somebody shoots up their workplace and kills an immediate supervisor or the like; but nobody ever seems to go any higher up the food chain.

    1. Re:It must be nice... by FatdogHaiku · · Score: 2

      Not even close. 88/2.7 rounds to 32.59. So, if Lawyers don't get any of that it's still three months cramming fees per person, and it went on longer than three months you can bet... someone should start a percentage based audit service and get some small claims action going. This was mandated by the FTC so I'd be shocked if it abrogated ones rights to seek further redress.

      --
      You have the right to remain sentient. If you give up the right to remain sentient, you will be elected to public office
  4. Profit by Princeofcups · · Score: 4, Insightful

    Make $196m illegally. Pay $88m fine. That's $88m profit. What's the incentive to stop doing these things again?

    --
    The only thing worse than a Democrat is a Republican.
    1. Re:Profit by Ksevio · · Score: 2

      The law and of course it's ethically...aw sorry couldn't finish that with a straight face.

  5. Why are 3rd parties allowed to bill you? by knorthern+knight · · Score: 2

    The real problem...

    * you have a phone number that is either published in a phone book or a private database that bad guys can buy

    * any 3rd party hole-in-the-wall outfit can come along and send billing tapes to the telco

    * you get billed, and have to dispute the bill to get your money back

    What's required is an option allowing the phone customer to pre-emptively disable 3rd party billing. The telcos get a cut of the bill, and have every incentive to continue. It would require action by regulators to enforce a prohibition against 3rd party billing.

    --

    I'm not repeating myself
    I'm an X window user; I'm an ex-Windows user