FTC Providing Over $88 Million in Refunds to Consumers Subjected to Mobile Cramming

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The Federal Trade Commission has announced that it will be providing over $88 million in refunds to more than 2.7 million AT&T customers who had third-party charges added to their mobile bills without their consent, a tactic known as “mobile cramming.” The refunds relate to 2014 settlements with AT&T, and the companies behind two of the cramming schemes, Tatto and Acquinity.

The refunds represent the most money ever returned to consumers in a mobile cramming case. Current customers will receive a credit on their bill, while former customers will receive a check.

“AT&T received a high volume of complaints related to mobile cramming prior to the FTC and other federal and state agencies stepping in on consumers’ behalf,” said FTC Chairwoman Edith Ramirez. “I am pleased that consumers are now being refunded their money and that AT&T has changed its mobile billing practices.”

According to the FTC’s complaint, AT&T placed unauthorized third-party charges on its customers’ phone bills, usually in amounts of $9.99 per month, for ringtones and text message subscriptions containing love tips, horoscopes, and “fun facts.” The FTC alleged that AT&T kept at least 35 percent of the charges it imposed on its customers.

A copy of the settlement, which also involved all 50 states and the District of Columbia, as well as the Federal Communications Commission, can be seen, here.

Contact an advertising compliance attorney if you are the subject of a regulatory enforcement investigation or action, or if you are interested in implementing preventative compliance measures.

HINCH NEWMAN LLP. ADVERTISING MATERIAL. These materials are provided for informational purposes only and are not to be considered legal advice, nor do they create a lawyer-client relationship. No person should act or rely on any information in this article without seeking the advice of an attorney. Information on previous case results does not guarantee a similar future result.

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Richard B. Newman is an advertising law and regulatory defense attorney at Hinch Newman LLP focusing on Internet marketing compliance and digital media matters. His practice involves conducting legal compliance reviews of advertising campaigns across all media channels, regularly representing clients in high-profile investigative proceedings and enforcement actions brought by the Federal Trade Commission and state attorneys general throughout the country, advertising and marketing litigation, advising on email and telemarketing best practice protocol implementation, counseling on eCommerce guidelines and promotional marketing programs, and negotiating and drafting legal agreements.

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