The Regulatory Mix, TMI’s daily blog of regulatory activities, is a snapshot of PUC, FCC, legislative, and occasionally court, issues that our regulatory monitoring team uncovers each day. Depending on their significance, some items may be the subject of a TMI Regulatory Bulletin.
FCC and FTC
AT&T Mobility entered into separate agreements with the FCC, the FTC, and the attorneys general of all 50 states and the District of Columbia to settle charges of mobile cramming. The $105 million monetary settlement will be paid as follows: $80 million to the FTC to provide refunds to consumers that were crammed; $20 million to state governments participating in the settlement, and a $5 million payment to the US Treasury as settlement of the FCC’s investigation. The charges involved were for third-party Premium Short Message Services (PSMS). PSMS charges included services such as monthly subscriptions for ringtones, wallpapers, and text messages providing horoscopes, flirting tips, celebrity gossip, and other information. The typical charge for these types of subscriptions was $9.99 per month.
The FCC investigation focused on charges that AT&T: (1)engaged in an unjust and unreasonable practice of billing consumers for products or services they had not authorized; and (2) failed to provide a brief, clear, non-misleading, plain language description of the third-party charges on the telephone bills sent to consumer. The FTC proceeding focused on charges that AT&T participated in deceptive and unfair acts or practices by including unauthorized charges on the telephone bills of its mobile phone customers.
Under the FCC settlement, AT&T agreed it would: no longer offer commercial third-party “premium SMS” charges; adopt processes to obtain express informed consent from customers prior to allowing third-party charges on their phone bills; revise its billing practices to ensure that third-party charges are clearly and conspicuously identified on bills so that customers can see what services they are paying for; and offer a free service for customers to block all third party charges. Under the FTC settlement, AT&T must notify all of its current customers who were billed for unauthorized third-party charges of the settlement and the refund program by text message, e-mail, paper bill insert and notification on an online bill; obtain consumers’ express, informed consent before placing any third-party charges on a consumer’s mobile phone bill; clearly indicate any third-party charges on the consumers’ bill; and provide consumers with the option to block third-party charges from being placed on their bill. Both decrees also include reporting and recordkeeping requirements.