AT&T to Pay $7.75M For Phone Bill Scam

PC Mag – by Stephanie Mlot

AT&T will pay $7.75 million to settle an FCC investigation into whether the company added unauthorized cell phone charges to customers’ bills.

According to the FCC, the carrier allowed scammers to charge approximately $9 per month for a sham directory assistance service.  

Drug Enforcement Administration (DEA) agents discovered financial documents related to a scheme while investigating two Cleveland companies for drug-related crimes and money laundering. Those companies, Discount Directory, Inc. (DDI) and Enhance Telecommunications Services (ETS), were set up to bill thousands of customers—mostly small businesses—for a monthly directory assistance service on their local AT&T landline telephone bills.

AT&T received a fee for each charge it placed on a user’s bill. But—surprise!—while DDI and ETS submitted charges for thousands of customers, they never actually provided any directory assistance. Nor could any of the companies prove anyone ever agreed to be billed for the faux feature.

The FCC’s Enforcement Bureau took over the DEA’s investigation last year.

“A phone bill should not be a tool for drug traffickers, money launderers, and other unscrupulous third parties to fleece American consumers,” Bureau Chief Travis LeBlanc said in a statement.

The $7.75 million settlement, he said, “ensures that AT&T customers who were charged for this sham service will get their money back and that all AT&T consumers will enjoy greater protections against unauthorized charges on their phone bills in the future.”

Under terms of this week’s deal, AT&T must issue full refunds—expected to total $6.8 million—to all current and former consumers charged for the fake service since January 2012. The company will also pay an additional $950,000 fine to the US Treasury.

This isn’t the first time AT&T has been caught cramming bogus fees onto customers’ bills. In October 2014, the company paid a $105 million settlement; $80 million went to the Federal Trade Commission for refunds, $20 million to state governments, and $5 million to the Treasury.

One thought on “AT&T to Pay $7.75M For Phone Bill Scam

  1. Awwwwsummm…
    Now I can get a refund check from ATT for over charging me for watching porn on their network.
    Now that’s a sweet deal.

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