AT&T Settles Over Disputed Third Party Fees

According to an AP report, AT&T cell-phone customers may be eligible for refunds who have ringtone and some other third party content charges on their phone bills.

This is part of a settlement in a group of class-action lawsuits and the customers can claim refunds for some charges that appeared on a maximum of 3 monthly bills between January 1, 2004 and May 30, 2008.

Jay Edelson, who is lead counsel for the plaintiffs, said that this is the first such settlement over third-party content. Edelson’s firm has also filed comparable suits in opposition of Verizon Wireless, Sprint Nextel Corp, and T-Mobile USA.

Charges as a result of a customer getting ringtones or due to daily text-message services for horoscope and/or jokes which request customers to sign up by entering phone numbers via Web sites or conveying text messages can be hidden or poorly explained. These charges are often recurring and later show up on cell-phone bills. A cell-phone carrier retains part of the fee and forwards the remainder to the content provider.

The settlement contains sixteen class-action suits and alleges that AT&T, which does not admit wrongdoing, should have been more cautious when inspecting the services. In the article, Edelson says that the company “really does want to fix this problem and not benefit from any of the unscrupulous third-party instances out there.”

For third-party services with recurring fees, AT&T now requires its customers who wish to sign up for these services to confirm via a text message reply. Monthly reminders which contain directions on how to unsubscribe are also required.

Marty Richter, an AT&T spokesman, did not have an estimate with regard to how much AT&T will pay out. He also stated that the number of customers receiving refunds via the settlement will be small as AT&T has previously allowed their customers contest specious charges.

Approximately 70 million AT&T Mobility customers will soon receive notifications about the settlement. The settlement is preliminary as of May 30. The final hearing is set for December 8. Claimants will have 90 days after final approval to file.

(June 4, 2008)