AT&T Inc. will pay $7.75 million in refunds and fines after federal investigators found it allowed unauthorized third-party charges related to phony directory-assistance service on its customers’ telephone bills, U.S. regulators say today.
Reuters reports that the fraud was uncovered by the U.S. Drug Enforcement Administration while investigating two Ohio companies for drug-related crimes and money laundering, the Federal Communications Commission says.
AT&T, the Dallas-based telecommunications giant, allowed “scammers to charge customers approximately $9 per month for a sham directory assistance service,” the FCC says. AT&T received a fee from the companies for each charge AT&T placed on its customers’ bills, the FCC adds.
The settlement includes $6.8 million in refunds and a $950,000 federal fine, the FCC says.
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.
AT&T says in a statement it has “implemented strict requirements on third parties submitting charges for AT&T bills to ensure that all charges are authorized by our customers; indeed, those requirements go beyond the requirements of FCC rules and impose safeguards that the FCC proposed but never adopted.”
