Mo. receives $315K in AT&T settlement

Missouri is set to receive $314,715 in penalties for its part in a national multimillion-dollar settlement with AT&T Mobility LLC.

The settlement resolves claims that the AT&T Inc. (NYSE: T) subsidiary engaged in a practice known as cramming, or placing charges for third-party services on customers' mobile phone bills without their authorization, according to a news release.

“Cramming is an insidious practice that has cheated thousands of Missourians out of their hard-earned money,” Koster said in the release.

AT&T Mobility, as well as Verizon, Sprint and T-Mobile, last fall announced they would stop billing customers for the third-party charges. AT&T is the first to enter a settlement resolving cramming allegations.

According to the release, consumers harmed typically received charges of $9.99 per month for text message subscription services for information such as horoscopes, trivia and sports scores. Consumers often received these services without having requested them, according to Koster's office.

Under the terms of the nationwide settlement with the Federal Trade Commission and the Federal Communications Commission, AT&T Mobility is required to pay $80 million in refunds to victims of cramming. The company also agreed to pay $20 million in penalties to states and $5 million to the FCC, the release said.

Starting today, consumers can submit claims for refunds at FCC.gov.

In addition to penalties, the settlement agreement also states AT&T Mobility must:

• obtain customers' express consent before billing them for third-party charges;
• provide full refunds to any consumers billed for unauthorized third-party charges after the settlement;
• inform customers when they sign up for services that their phones can be used to pay for third-party charges and must inform them of how to block those charges; and
• present third-party charges in a dedicated section of consumers' bills.

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