Virginia Attorney General Mark Herring joined the attorneys general of the other 49 states and the District of Columbia, the Federal Trade Commission and the Federal Communications Commission in a $105 million settlement with AT&T Mobility Wednesday.
The settlement is a result of claims against AT&T Mobility for “cramming” their customers with additional third-party charges, according to a press release from Herring's office. AT&T Mobility is the first cellular phone provider to be involved in a national settlement concerning third-party charge allegations.
“Cramming” means customers are charged without their express consent, which can result in charges of about $9.99 per month, according to the press release.
"This settlement sends a strong message that deceptive billing practices will not be tolerated in any context and no business should try to slip charges by Virginia consumers," Herring said in the statement. "I am pleased that we were able to reach a fair and reasonable agreement with AT&T Mobility that will provide for direct refunds to Virginians, and will help protect consumers from unauthorized third-party billing in the future.”
The settlement is a result of nearly a year of deliberation, attorney general spokesperson Michael Kelly said.
“AT&T and other wireless carriers stopped this practice last fall,” he added.
The settlement between AT&T and state attorney generals took “many months” to come together, Kelly said.
AT&T spokesperson Walter Sharp was out of the office and unavailable for comment.
The settlement requires AT&T to pay $80 million to the Federal Trade Commission for consumer restitution. AT&T is required to pay $356,779.21 to Virginia for involvement in the settlement, apart from the restitution AT&T owes to Virginian consumers.
Affected consumers will receive an automatic notification through the refund program or can file a claim online through the FTC, the press release said. Herring is also encouraging Virginian consumers to closely check billing statements and fully understand what programs they sign up for going forward.
The settlement also requires AT&T to take further steps to prevent billing customers for unauthorized third-party charges in the future, requiring them first to obtain consumer consent. They must also fully refund consumers who were unnecessarily billed for third-party charges, and distinguish between third-party charges and standard AT&T charges.
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