AT&T will refund pay-as-you-go smartphone customers for overcharging

AT&T to pay $700,000 fine to U.S. treasury
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AT&T Mobility (NYSE:T) will pay a $700,000 fine to the U.S. Treasury and refund pay-as-you-go smartphone customers who had been forced into monthly data plans, the FCC said.

After an investigation that started in 2011, the FCC said AT&T agreed to settle complaints that it switched certain consumers to its mandatory monthly data plans even though it had promised they could retain their existing pay-as-you-go data plans.

The FCC said AT&T agreed to refund excess charges paid by individual customers, which could be as much as $25 to $30 a month, depending on their data usage. In September 2009, AT&T mandated that all new smartphone customers or those who upgraded their phones sign up for monthly data plans. The company switched customers that were on pay-as-you-go data plans to the monthly plans two months later. Consumer complaints prompted the FCC to launch an investigation.

Prior to the changes AT&T made in 2009, the carrier had allowed its smartphone customers withpay-as-you-go data plans or customers that had disabled their network data to keep their old plans. However, the FCC said that customers who replaced these phones under warranty or insurance or who moved were switched to the monthly plans, even though AT&T promised they could keep the old plans.

"Today's action sends a clear signal that wireless carriers can't wrongfully charge consumers,'' FCC Chairman Julius Genachowski said in a statement. "These strong FCC accountability measures will ensure customers are not over-charged. I am pleased that AT&T is taking the appropriate steps to resolve this issue."

AT&T spokesman Marty Richter downplayed the significance of the settlement, according to CNET. He said that the number of customers affected amounted to less than 0.03 percent of the company's wireless customers. Richter also said that AT&T had discovered and corrected the issue by November 2010, and had offered refunds to customers who contacted AT&T.

"Based on a review of our refund process, we believe a vast majority of those customers affected by the billing error have already been made whole," Richter said. "But as part of the decree we'll be providing a bill-page notice to affected customers, offering refunds, and giving them the option to return to a data pay-per-use plan, or to have a data block applied to their phone."

For more:
- see this FCC release (PDF)
- see this CNET article
- see this The Verge article
- see this IDG News Service article

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