If you are an AT&T subscriber, there's a good chance you have $31 coming to you. That's because AT&T just agreed with the FTC to refund $88 million back to their subscribers. AT&T is not the first carrier to get fined for Cramming. All of the carriers have done this out of greed. Here's how it works and why it was such a strong source of revenue for carriers. In the old days, there was an option to pay for a text messaging package. Today, Unlimited texting is free. The carriers would partner with 3rd party companies, agreeing to provide the billing services for these companies. In return, these companies allowed the carriers to keep anywhere from 35-50% of the monthly revenue. One of the most popular was a service offering a joke of the day. Most people wouldn't think twice getting a joke e-mailed to them, as it wasn't costing them to receive text messages. If they knew a new monthly charge of $9.99 would miraculously appear on their phone bill each and every month, they'd likely go ballistic.
As I work with several Universities that would send all phone bills to a central accounting department for payment, this presented a huge problem. Only the end user would likely recognize bogus charges like these. The FTC indicated the refunds are related to 2014 and the companies behind two mobile cramming schemes, Tatto and Acquinity. According to the FTC's complaint in the matter, AT&T levied third-party charges – usually amounting to around $10 per month – for ringtones and text message subscriptions on customer accounts without their knowledge. The FTC alleged AT&T kept at least 35 percent of the fraudulent charges.
According to the FTC, the refunds will go to some 2.7 million AT&T customers across all 50 states. The Commission said 2.5 million individuals getting refunds are current AT&T customers who will receive a bill credit within the next 75 days, while an additional 300,000 plus former customers will receive a check in the mail.
Hopefully, your check is in the mail!
Joel Saltzman has over twenty years of wireless industry experience. He is currently CEO and Chief Wireless Analyst for Dr Wireless.