AT&T Mobility Enters into $105 Million Settlement with FTC for Alleged Mobile Cramming

Print Friendly, PDF & Email

October 10, 2014

crammingEarlier this week, AT&T Mobility, LLC (“AT&T) entered into a Stipulated Order for Permanent Injunction and Monetary Judgment with the Federal Trade Commission (“FTC”) relating to allegations of mobile “cramming,” the unlawful practice of placing unauthorized third-party charges on mobile telephone bills.

$105 Million Mobile Cramming Settlement

As part of the settlement, AT&T agreed to pay $105 million as follows: (i) $80 million to the FTC for consumer redress; (ii) $20 million to numerous states as part of a “Multi-States Attorneys General Settlement;” and (iii) $5 million to the United States Treasury on behalf of the FCC as part of an FCC settlement.

The FTC, through a third party settlement administrator, is providing a claims-based refund pool for AT&T customers who were billed since January 1, 2009 for third party charges to their mobile telephone bills which were allegedly unauthorized.

In addition to the large monetary component of the settlement, AT&T is further required to, among other things:

  • Develop and implement a system by February 1, 2015 to obtain “Express Informed Consent” from its customers before placing any third party charges on their mobile telephone bills;
  • Implement a system that provides customers with purchase confirmations separate from customer telephone bills within a reasonable amount of time following the purchase of third-party products/services;
  • Provide a clear and conspicuous disclosure to customers about third party charges and customers’ ability to completely block them from their telephone bills; and
  • Notify all of its current customers who were billed for allegedly unauthorized third party charges of the settlement by text message, email, paper bill insert and online bill notification.

The FTC’s Goal in Thwarting Mobile Cramming

As we previously reported, the FTC has issued best practice guidelines to combat mobile cramming.  The AT&T settlement demonstrates the tremendous potential penalties that may arise from cramming allegations (and their associated judgments or settlements).  For anyone in this space, it is important to keep abreast of new developments and to understand those state and federal laws applicable to mobile telephone billing, as well as the Mobile Marketing Association’s own set of guidelines.

If you are interested in learning more about this topic or are facing private or regulatory action relating to telephone billing, please e-mail us at, or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

Attorney Advertising

David O. Klein

David O. Klein

David Klein is one of the most recognized attorneys in the telemarketing, technology, Internet marketing, sweepstakes and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

Schedule a Call
In The Know

Trending Topics

New York Sweepstakes Law blog- Klein Moynihan Turco

New York Sweepstakes Law: Are You Compliant?

Print Friendly, PDF & Email

In general, a lottery exists when entrants pay for the chance to win a prize. States alone reserve the right to administer lotteries. Businesses can eliminate one element of what would otherwise be an illegal lottery, in order to transform it into a legal promotional game. If the requirement to

TCPA surveys

An Ad or not an Ad: NY Weighs in on TCPA Surveys

Print Friendly, PDF & Email

Another day, another court decision that refines constitutes a Telephone Consumer Protection Act (“TCPA”) unsolicited fax advertisement. A Manhattan-based federal court recently issued a decision that removes faxed invitations to participate in a survey from the TCPA definition of advertisement. In drawing this distinction for TCPA surveys, the Court held

NY sports gambling law- Klein Moynihan Turco

Agreement Reached to Enact NY Sports Gambling Law

Print Friendly, PDF & Email

This week, Governor Andrew Cuomo and the New York State Legislature agreed to a budget deal that will bring mobile sports betting to the State through a unique NY sports gambling law.  Upon the Governor’s signature, NY sports gambling is primed to become the nation’s largest market. However, New York

UK and US Social Media Influencer Laws

UK and US Social Media Influencer Laws

Print Friendly, PDF & Email

In September of 2020, the United Kingdom’s (“UK”) Committee of Advertising Practice (“CAP”) reviewed the Instagram accounts of 122 UK-based social media influencers to determine whether content was being properly flagged as advertising in accordance with applicable social media influencer laws. This past March, the UK Advertising Standards Authority (“ASA”)

Share on facebook
Share on google
Share on twitter
Share on linkedin