AT&T Agrees To Pay $7.75M After Investigation Of Bogus Phone Charges
The FCC said AT&T permitted scammers to charge about $9 a month for a fake directory assistance service.
Agents with the Drug Enforcement Administration found financial documents tied to a system while they probed two Cleveland companies – Enhance Telecommunications Services and Discount Directory, Inc. – for money laundering and drug-related crimes. The companies were created to bill customers, mainly small businesses, for a directory assistance service on the local landline telephone bills.
AT&T attained a fee for every charge that was put on the user’s bill. And, even though the companies submitted the charges, they never provided any type of directory assistance. They also couldn’t provide agreements from people about the billing of the fake feature.
The DEA turned over its investigation to the FCC’s Enforcement Bureau in 2015.
Travis LeBlanc, the FCC chief, said a phone bill is not a tool for money launderers, drug traffickers or other illegal third-party companies to steal money from American consumers.
He said the $7.75 million settlement with AT&T ensures its customers will get their money back after being charged for this fraudulent service, and it will ensure they have better protections against future illegal charges.
AT&T will offer full refunds, totaling $6.8 million to former and current consumers that were charged for the bogus service since 2012. Roughly $950,000 will be paid to the U.S. Treasury.
This is not AT&T’s first time to be caught with bogus fees on their customers’ bills. The company was ordered to pay $105 million in October 2014. $5 million went to the Treasury, $20 million went toward state governments and $80 million was given to the Federal Trade Commission to be issued as refunds.