AT&T will pay $105 million to settle allegations that it put unauthorized charges on customers' cell phone bills, a practice also known as "cramming."
The settlement was confirmed by the Federal Trade Commission on Wednesday, and comes after years of complaints from consumers about being charges for services, according to Reuters.
"Today, we reached a broad settlement to resolve claims that some of our wireless customers were billed for charges from third-parties that the customers did not authorize. This settlement gives our customers who believe they were wrongfully billed for PSMS services the ability to get a refund," an AT&T spokesman said in an emailed statement.
The telecommunications giant will pay $80 million to refund customers while $20 million is to pay penalties and fees to all 50 U.S. states and Washington, the FTC confirmed.
Another $5 million in penalties will go to the Federal Communications Commission (FCC), the agency said in a statement to Reuters.
The FTC claimed in its complaint that for companies whose billing was handled by AT&T complained about the chargers.
AT&T, T-Mobile, Sprint and Verizon all agreed in November to stop billing customers for such third-party services, due to pressure from state attorneys general.
"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, chairwoman of the FTC, said in a statement, adding that she was pleased that consumers would get refunds.
The FTC filed a complaint in July against T-Mobile USA, claiming the wireless provider of cramming millions of dollars of unauthorized chargers onto its consumers' bills, according to Reuters.
The FCC is also investigating T-Mobile US for cramming.
Charges are often buried in multi-page cell phone bills and described generically. For example, if you see "usage charges" on your bill, you may want to contact your provider for more information.
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