Remember how back in late 2013, three major carriers — AT&T, Sprint, and T-Mobile entered into an agreement with 45 states to stop billing customers for premium short code SMS messaging? Just recently, AT&T reached a $105 million settlement with federal and state law enforcement, based on charges assessed to customers through premium SMS billing.
As part of the $105 million, AT&T will pay $80 million to the Federal Trade Commission to provide refunds to consumers that were unlawfully billed for unauthorized premium SMS messaging charges. In addition, AT&T must also pay $20 million in penalties and fees paid to 50 states and the District of Columbia, as well as a $5 million penalty to the Federal Communications Commission.
Just how big of a problem did premium SMS messaging become in the United States before the carriers agreed to ban it? It’s estimated that every year, premium SMS billing costs consumers nearly $2 billion in additional charges on their wireless bills. Considering that there’s 326.4M wireless subscribers in the United States, that means that on average, each wireless subscriber was paying an additional $6/year in just premium SMS fees.
It’s crazy to note that when the FTC investigated AT&T, it found that some third-party premium SMS providers complaints reached as high as 40% of subscriptions charged to AT&T consumers in a given month. In 2011 alone, the FTC found that AT&T received more than 1.3 million calls from their customers regarding premium SMS charges.
AT&T customers that were charged for premium SMS messaging can visit www.ftc.gov/att to submit a refund claim and find out more about the FTC’s refund program under the settlement. If consumers are unsure about whether they are eligible for a refund, they can visit the claims website or contact the settlement administrator at 1-877-819-9692 for more information.
Under the terms of its settlement with the FTC, AT&T will notify all of its current customers who were billed for premium messaging by text message, e-mail, paper bill insert and notification on an online bill.