State settles with AT&T Mobility (Cingular) in cell phone fraud case

You may be eligible for a refund if your AT&T/Cingular cell phone was billed for ring tones, horoscopes or other services you thought were free. Florida Attorney Gen. Bill McCollum announced a settlement this morning that includes refunds for customers, a $2.5-million payment to his office and an additional $500,000 to pay for consumer education on safe internet use. The state said it expects the refunds to be between $10-million and $45-million, based on the information it received from AT&T.

"Consumers should never be billed for services they thought were free of charge," McCollum said. "Today's agreement establishes a precedent for wireless companies accepting responsibility for the charges placed on consumers' bills."

AT&T wasn't behind the fraud, but made the fraud possible by including the third-party charges on customers' bills. McCollum said the fraud often targeted teenagers who didn't realize by downloading a ringtone or other content, their phones would be charged a monthly subscription fee. As part of the settlement, AT&T agreed to set strict advertising disclosure standards for third-party providers.

AT&T will send a notice of the settlement to current account holders and to former customers for whom it still has an email address. A toll-free telephone number and Web site will be set up with information on how to make a claim.

Comments

[Doran Cushing]

It's nice to see Florida's elected officials doing something about the
rampant fraud in the telecommunications industry. But my case, which
is very similar to the AT & T case, involves Verizon and their internet
access fraud. This fraud has been dismissed as "unenforceable" by the Florida Public Utilities Commissioner due to the fact that wireless services and cable/internet services are exempt from most regulations. Without getting into how these corporate moguls came to be "unregulated," let me provide examples of how Verizon has attempted to fraudulently "sign me up" for services not ordered. In the "land line" terminology, that practice is called "cramming" and is totally illegal.

My case: I called Verizon to change one of the added services, specifically to add distinctive ring and drop call forwarding for my landline. In the process of making the request, the Verizon agent (Annette) asked if I was interested in a package deal with FIOS TV and internet service, combined with the landline service. I initially declined. After calculating the possible savings of separate billings from Verizon, Brighthouse, and Earthlink, I asked for the plan providing internet access and landline...Annette had later advised that the TV and Internet service was not, in fact, FIOS, but Direct TV and standard cable internet.

She offered a plan with better local and long distance pricing, combined with the internet service. I agreed (along with changing the call forwarding to distinctive ring. She assigned a distinctive ring number at that time. Fine business as they say on Ham radio.

This transaction took place on November 30, 2007. On Dec. 1, I received four e-mails from Verizon:

Each of the first four e-mails open with:

"Subject: Action Required: Your Verizon Online Verizon Internet Security Suite 3 PCs Order" (and three subsequent added services)

"Dear Valued Verizon Online Member,

To complete your recent order of the service(s) below, please ACTIVATE NOW. Thank you!"

E-mails for each of the three services which were not ordered went on to say: "Dear Valued Verizon Online Member,
Thank you for your recent order of the service(s) below. If you haven't already, this is a reminder to ACTIVATE NOW.Billing for all your services began on the date your Internet service was ready if you're a new subscriber, or on the date you ordered your Broadband Essentials & Extras service if you're a current subscriber. Activate today."

and the deception continued:

"Congratulations and welcome to Verizon Online! Your Verizon High Speed Internet service is ready on your line ending in 2046. Billing on your account will begin now that your service has been activated."

I ordered none of the additional services. Billing on the account had begun but I didn't have the hardware (wireless modem from Verizon) to use the service.

This is blatant fraud. If they recorded the call for "training purposes" it would confirm I ordered none of the add-ons. It also would point out that Annette stated the billing would not begin until the modem was received and service initiated on my end.

Most curiously, the TV is full of ads from Verizon promoting a package deal of phone, TV, and Internet for $99, boasting about the picture quality of the TV via the FIOS network. But they do not offer TV via FIOS, only via an independent satellite company such as Dish or Direct TV. More fraud. More lies.

The summary response from Verizon has been that I ordered the services, then canceled the services. A total lie. Every Florida state agency I contacted denied any responsibility and stated the services were "unregulated."

Yeh - Verizon fixed the billing (or at least most of it. I'm still paying for distinctive ring 3 months after Verizon said the billing was fixed).

So now my only option is to contact the Attorney General's office and pursue the illegal business practice by Verizon on another level.

Documentation supporting the actions and responses by Verizon are available to anyone who is interested...I intend to keep these hard copy communications until the fraud is resolved.

Doran Cushing

I was charged $35/month by Spirit Airlines for their "travel" club due to an "implied consent" when I booked on their web site. I complained to Visa, and Spirit removed it. Horrable.

[Jane Marie]

Dear Helen-
Today's article about AT&T's settlement deserves follow-up and I hope to see more reports as other cell phone companies are investigated.

The article today seemed to indicate that the ONLY way the charge was placed on someone's bill was if they "signed up" for what they thought was a free service. This is not the case as I was a victim of Alltel's willingness to allow 3rd parties to place charges on my bill.

In short, I noticed a charge for $9.99 on my Alltel bill one month and called to find out what it was. I was told by Alltel that I signed up for a daily horoscope to be delivered to my cell phone via text. I informed them that 1) I have text messaging blocked (they confirmed this) and that 2) I did not sign up for the service.

They proceeded to insist that I did sign up for the service and they could not refund my money just give me information to try and cancel the service. The 800# they gave me did not work (it was just a message) but I kept pursuing the matter until I found out the name of the third party that was telling Alltel to put these charges on my bill. They (the 3rd party) told me that they only bill once they have sent a customer a text message (remember I have text messaging blocked!) to confirm. Turns out the text message requires you to respond only if you want to cancel the service; if you don't respond they consider it a confirmation!!! In addition I found that ANYONE can visit one of these websites and just enter my phone number. No name or other cross check is needed! Can you imagine the potential for fraud? I can, it happened to me.

I explained all my findings to Alltel and told them I had not authorized them to use my "account" as a credit card and they may not place any 3rd party charges on my phone bill. Of course they told me they had no way to stop that!!! That's when I contacted the FCC to complain about this practice. After TWO MONTHS of research, phone calls and emails to Alltel the charges were refunded. In addition they gave me a credit (w/o me asking for it) of $25 for my trouble!

So you can see that there is more to this story....the concept that a phone company can place 3rd party charges on a bill is what needs to change! I would appreciate any further exposure you can place on this practice through your reporting!

Maybe Bill McCullum could use that $2.5 million paid to his office to do Pearlmans victims some good, like holding banks responsable for facilatating a fraud, by denying them shelter in the "not responsable to 3rd parties" nonsense that banks try to claim when they are negligent and complicit. He could do his friend Charlie Crist some good in the process.