TALLAHASSEE, FL – In a significant step toward protecting consumers throughout the nation from unauthorized charges on cell phone bills,
Attorney General Bill McCollum today announced that AT&T Mobility
will be the first wireless company in the nation to police
representations made in internet advertising for cell phone content to
ensure fair and full disclosure. The company will also make full
restitution to Florida consumers who were unknowingly billed for
“free” cell phone content. The cooperative agreement reached by the
Attorney General’s CyberFraud Task Force with AT&T Mobility will
establish a new model for the advertising and billing of cell phone
content. Additionally, AT&T Mobility will pay $2.5 million to the
Attorney General’s Office to fund the efforts of the task force as it
continues to press for similar reform across the industry and will
contribute an additional $500,000 toward consumer education on safe
internet use.
“Consumers should never be billed for
services they thought were free of charge,” said Attorney General Bill
McCollum. “Today’s agreement establishes a precedent for wireless
companies accepting responsibility for the way cell phone content is
advertised on the internet and the manner in which charges are passed
along to consumers. AT&T should be commended for being the first
wireless company in the industry to offer this reform.”
Complaints received by the Attorney General’s CyberFraud Task Force led to an investigation which showed that thousands of Florida
AT&T Mobility consumers had received charges on their cell phone
bills for certain third party services that they did not authorize.
Often, these charges were for ringtones or other services which were
advertised as “free,” but resulted in customers unwittingly being
signed up for costly monthly subscriptions for third-party content,
including horoscopes, wallpaper and other cell phone-related content.
Examples of the bill charges often appear under the following
indiscernible names:
- “Direct Bill Charges"”
- “3rd Party Downloadable Content”
- “Premium SMS Messages”
- “Premium Text Messages”
- “M-Qube”
- “M-blox”
Investigators further determined that these third-party content offers
often target teens who frequently respond to these advertisements because they think the services are “free,” and download them to their cell phones, not knowing their parents will later be charged. These misleading practices are common in the industry and wireless companies
often receive a percentage of the charges paid by consumers. Attorney General McCollum also announced today that he has directed the
CyberFraud Task Force to initiate investigations into Verizon,
Sprint/Nextel, Alltel and T-Mobile in an effort to ensure that all
Floridians will be protected from being similarly charged without
their knowledge.
“This settlement comes at a time when the
digital consumer is faced with new deceptive internet scams on a daily
basis,” said Brad Ashwell, legislative advocate for the Florida Public
Interest Research Group. “It’s encouraging to see a corporation of
AT&T’s magnitude taking responsibility for unfair charges and it
is encouraging that the funds from this settlement will ensure that
the Attorney General’s CyberFraud Task force continues protecting
consumers in the virtual marketplace.”
Under the agreement
announced today, AT&T Mobility has agreed to adopt and enforce
strict standards for internet advertising developed by the CyberFraud
Task Force. The company, through its contracts with all content
providers and advertisers, will now require those entities to clearly
and conspicuously disclose the true cost of ringtones and other
content in all online advertising to potential customers. For example,
a “free” ringtone offer that results in a monthly subscription at a
cost of $9.99 per month to the customer must now clearly state, “Free
ringtone with paid monthly subscription of $9.99/month,” and any such
charges must be separately set out in the consumer’s AT&T Mobility
monthly bill. This will ensure that parents have timely notice of any
unauthorized charges so they may cancel such subscriptions if they
wish. Moreover, AT&T Mobility will continue to offer parents the
option of blocking downloaded content from their children’s cell
phones and will make this service available free of charge if
third-party charges have already been billed without the parents’
knowledge.
The agreement with AT&T Mobility, formerly
known as Cingular Wireless, allows customers to seek refunds even if
they are no longer AT&T or Cingular customers. The company has
also agreed to enhance its customer complaint resolution process and,
upon request, will terminate a customer’s enrollment in any recurring
membership program and will issue full credits and refunds without
referring the customer to a third party for such resolution. The task
force intends to use the AT&T Mobility agreement as a model as it
continues its investigation of the industry.
