sms premium

The US government has just handed AT&T a significant fine for allowing third party companies to stealthily tack on their charges to customer phone bills for things like spam SMS text messages. The announcement was made on Wednesday in a joint press conference by the FCC and FTC, who say this is the largest “cramming” settlement in history.

In total, AT&T will pay out $105 million to settle the case—$80 million is earmarked for the FTC, which it will use to set up a reimbursement program, $5 million will go to the FCC, and $20 million will go to individual states. Additionally, the carrier has been ordered to begin proactively informing subscribers if extra fees are going on their accounts.

It’s an unusually large settlement, but it didn’t come unwarranted. During their inquisition, federal investigators found that AT&T made hundreds of millions of dollars by taking a 35% cut of the unwanted charges. Evidence also showed that it was in constant contact with the companies, and very good at dodging customer complaints about the charges.

Here’s AT&T’s statement on the matter:

“While we had rigorous protections in place to guard consumers against unauthorized billing from these companies, last year we discontinued third-party billing for Premium Short Messaging Services. 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 P.S.M.S. services the ability to get a refund.”

For those unfamiliar with the term, ‘Premium Short Messaging Services’ are services setup to send you gimmicky texts like ‘Daily horoscopes.’ Most of them are easy for non tech-savvy users to opt into, difficult to cancel, and cost $10 per month. It’s not just an AT&T-only thing either, early this year the FCC went after T-Mobile over similar complaints.

[FTC via The Verge]

  • Jeremy

    I couldn’t help but read that as PMS

  • I hate them. Charges out the ass with mine I had to leave them. T-mobile now is my carrier.

    • GuyBey0ndC00L

      I will be doing the same soon too.

      • Jersh Werse

        Same with me.

  • Tom

    Att does suck no unlimited hopefully att gets bought by tmobile

  • @dongiuj

    That money should go to the customers.

  • thomas

    I’m currently on AT&T. anyone recommend I switch to Verizon?

    • Wireless Corner

      It depends what you are willing to spend. Verizon provides the best service, however, at premium prices. Some people are willing to pay through the nose because they have a business or travel extensively and require the best service. For the rest of us a more cost effective service, even if not as good as verizon, will suffice. If you want to switch to T-mobile shoot me a message and I’ll hook you up with unlimited data through the refer-a-friend program. I recently did it with my friend (I’m on the $50/month plan) and now we both have unlimited data for 1 year (it’s like being upgraded to the $80/month plan for free). Now any more people I refer coming from another carrier is $10 off my monthly bill.

      • thomas

        Thanks for replying. My dad is thinking about going to t-mobile. I’ll dm you the details.

  • Seba

    Exactly! Customers should receive part of those millions !!!!

  • Doris Rowe

    Yes we’d no thought we started consuming and officers roll people begin offering people shit. We showed them we werent from LA so he wrote people up and let’s go. They told people about the stabbing and that at ATT you cant consume when dodgers are in town. Im an american group lover so I frequently go to Anaheim. Dodger arena is great however it thinks so old and everything is mad expensive. $13 for a alcohol 6$ for a warm pet and asade nachos were like $20. Joc and Greike went back to back so that cool.