Menu
AT&T fined after suspected drug traffickers slip charges into phone bills

AT&T fined after suspected drug traffickers slip charges into phone bills

The charges on customer phone bills were discovered during a DEA investigation

AT&T will pay a US$7.75 million fine for allowing suspected drug traffickers to add millions of dollars in bogus directory assistance charges to its customers' land-line bills.

The extra charges of about $9 a month were discovered during an investigation of two Cleveland-area companies for drug-related crimes and money laundering, the Federal Communications Commission said Monday.

"A phone bill should not be a tool for drug traffickers, money launderers, and other unscrupulous third parties to fleece American consumers," FCC Enforcement Bureau Chief Travis LeBlanc said in a statement. The settlement will allow AT&T customers "charged for this sham service" to get their money back, he said.

The Drug Enforcement Administration seized nearly $3.4 million worth of drugs, cars, jewelry, gold and computers during its investigation of Discount Directories and Enhanced Telecommunications Services, the FCC said. During the seizures, agents found financial documents related to the directory assistance scheme, which targeted thousands of telephone customers, most of them small businesses.

The companies billed for the directory services but never provided them, and neither company could show that AT&T customers had agreed to be billed, the FCC said. AT&T received a portion of each charge, the agency said.

AT&T has implemented "strict requirements" to crack down on third-party charges on telephone bills, a spokeswoman said by email. "Nonetheless, unbeknownst to us, two companies that engaged in a sophisticated fraud scheme were apparently able to circumvent those protections and submit unauthorized third-party charges that were billed by AT&T," she added.

AT&T stopped billing on behalf of the two companies in June 2015 and will also stop most other third-party billing on customer telephone bills, she added.

AT&T will issue refunds to current and former customers charged for the bogus services since January 2012. The refunds are expected to be about $6.8 million. The telecom carrier will also pay a $950,000 fine to the U.S. treasury.

Customers should get refund checks within 90 days, AT&T said.

Placing unauthorized charges and fees on telephone bills, often called cramming, is an "unjust and unreasonable" practice prohibited by the Communictions Act, the FCC said.

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Featured

Slideshows

Reseller News launches inaugural Hall of Fame lunch

Reseller News launches inaugural Hall of Fame lunch

Reseller News welcomed 2015 and 2016 inductees - Darryl Swann, Dave Rosenberg, Gary Bigwood, Keith Watson, Mike Hill and Scott Green - to the inaugural Reseller News Hall of Fame lunch, held at the French Cafe in Auckland. The inductees discussed how the channel can collectively work together to benefit New Zealand, the Kiwi skills shortage and the future of the industry. Photos by Maria Stefina.

Reseller News launches inaugural Hall of Fame lunch
Educating from the epicentre - Why distributors are the pulse checkers of the channel

Educating from the epicentre - Why distributors are the pulse checkers of the channel

​As the channel changes and industry voices deepen, the need for clarity and insight heightens. Market misconceptions talk of an “under pressure” distribution space, with competitors in that fateful “race for relevance” across New Zealand. Amidst the cliched assumptions however, distribution is once again showing its strength, as a force to be listened to, rather than questioned. Traditionally, the role was born out of a need for vendors and resellers to find one another, acting as a bridge between the testing lab and the marketplace. Yet despite new technologies and business approaches shaking the channel to its very core, distributors remain tied to the epicentre - providing the voice of reason amidst a seismic industry shift. In looking across both sides of the vendor and partner fences, the middle concept of the three-tier chain remains centrally placed to understand the metrics of two differing worlds, as the continual pulse checkers of the local channel. This exclusive Reseller News Roundtable, in association with Dicker Data and rhipe, examined the pivotal role of distribution in understanding the health of the channel, educating from the epicentre as the market transforms at a rapid rate.

Educating from the epicentre - Why distributors are the pulse checkers of the channel
Kiwi channel reunites as After Hours kicks off 2017

Kiwi channel reunites as After Hours kicks off 2017

After Hours made a welcome return to the channel social calendar last night, with a bumper crowd of distributors, vendors and resellers descending on The Jefferson in Auckland to kickstart 2017. Photos by Maria Stefina.

Kiwi channel reunites as After Hours kicks off 2017
Show Comments