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AT&T to pay $7.75 million for allowing sham directory-assistance calls

Posted by: Admin | Posted on: August 8th, 2016 | 0 Comments

WASHINGTON ATT Inc will pay $7.75 million in refunds and fines after federal investigators found it allowed unauthorized third-party charges related to phony directory-assistance service on its customers’ telephone bills, U.S. regulators said on Monday.

The fraud was uncovered by the U.S. Drug Enforcement Administration while investigating two Ohio companies for drug-related crimes and money laundering, the Federal Communications Commission said.

ATT, the Dallas-based telecommunications giant, allowed “scammers to charge customers approximately $9 per month for a sham directory assistance service,” the FCC said. ATT received a fee from the companies for each charge ATT placed on its customers’ bills, the FCC added.

The settlement includes $6.8 million in refunds and a $950,000 federal fine, the FCC said.

ATT signed a consent decree with the FCC and agreed to cease billing for nearly all third-party products and services on landline bills and adopt procedures to obtain express consent from customers prior to allowing third-party charges. The company also agreed to revise its billing practices to ensure third-party charges are conspicuously identified on bills.

ATT said in a statement it has “implemented strict requirements on third parties submitting charges for ATT bills to ensure that all charges are authorized by our customers; indeed, those requirements go beyond the requirements of FCC rules and impose safeguards that the FCC proposed but never adopted.”

The FCC said two Cleveland-area companies, Discount Directory Inc and Enhanced Telecommunications Services, were billing thousands of consumers for a monthly directory assistance service on their ATT landline telephone bills. The companies never provided any directory assistance service, the FCC said.

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

ATT said it stopping billing for the two companies in June 2015. “Unbeknownst to us, two companies that engaged in a sophisticated fraud scheme were apparently able to circumvent those protections,” ATT said.

ATT said it plans to send refund checks to consumers within 90 days.

In 2014, ATT agreed to pay $105 million in fines and refunds to current and former wireless customers for unauthorized third-party subscriptions and premium text messaging services as part of a settlement with the FCC, Federal Trade Commission and state attorneys general.

(Reporting by David Shepardson; Editing by Chizu Nomiyama and Will Dunham)

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