The Federal Trade Commission announced Wednesday that AT&T will pay a $105 million fine for what it calls mobile cramming.
Mobile crammingis defined by the FTC as "a long-time scam in which consumers' phone bills are used as a vehicle for unauthorized charges placed by third parties."
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The FTC alleges that AT&T charged its customers millions of dollars in monthly fees – usually $9.99 per month – for ringtones, horoscopes, fun facts and the like without those customers' authorization. And whatever the third-party company made, AT&T kept 35 percent of it.
The $105 million settlement breaks down to $80 million going into a pot to give eligible customers refunds, $20 million in penalties will be paid to state governments and a $5 million fine for the practice of mobile cramming will be paid to the FTC.
This the largest settlement ever for the FTC in a mobile cramming case, but to put things in perspective, this is just barely a drop in the bucket for the country's second largest mobile carrier.
Last year AT&T brought in a whopping $128.8 billion in annual revenue, up 1.9% from the year before.
Since 2013, the FTC has opened seven different cases regarding mobile cramming.
Arguably the most significant — now that AT&T has settled — is the FTC's suit against T-Mobile which was filed in July.
In response to the FTC's suit, T-Mobile's CEO released a statement saying, "Not all of these third party providers acted responsibly ... We believe those providers should be held accountable and that the FTC’s lawsuit seeking to hold T-Mobile responsible for their acts is not only factually and legally unfounded but also misdirected."
Any AT&T customers who think they have been billed unauthorized charges can got to FTC.gov for information on a refund.
This video includes images from Getty Images.
