Just the other day, the Federal Communications Commission (FCC) accused AT&T of overcharging a couple of school districts in Florida and suggested that the telecom company not just pay back the $63,760 worth of undeserved subsidies it got from the federal government, but also pony up an additional $106,425 as fines for failing to abide by the regulator’s E-Rate program, which entitles schools and libraries to receive subsidized telecommunication services. If that ruling by the Tom Wheeler-led FCC annoyed AT&T, the latest developments won’t do anything to please the company bosses either. According to reports coming in today, AT&T has reached a settlement with the FCC for being alleged unwitting partners of at least two fraudulent third-party operators who charged AT&T’s wireline customers $9 a month for bogus directory assistance tools between January 1, 2012 and June 2015.
As part of the deal, AT&T has agreed to pay up $7.75 million in all, including fines and refunds. While $6.8 million out of that amount will go towards refunding the AT&T customers who were unfairly and illegally skimmed by the third-parties, the remaining $950,000 will go to the U.S. Treasury as fines for the company’s obvious negligence in vetting the charges. It’s worth noting here that AT&T has not been held directly complicit in any illegal or fraudulent activity in this scheme, which was unearthed by the Drug Enforcement Administration (DEA) while investigating large-scale money laundering by drug cartels and other organized crime gangs in the country. The two companies under investigation by the DEA are Discount Directories and Enhanced Telecommunications Services, both of which were fronts for alleged drug traffickers according to law enforcement officials, and were based out of Cleveland, Ohio.
Following the announcement of the deal between the federal regulator and telecom operator, the later released a statement, saying that it has always “implemented strict requirements on third parties submitting charges for AT&T bills to ensure that all charges are authorized by our customers”. As it turns out, whatever “strict requirements” the carrier may have implemented was obviously not enough to stop criminals from infiltrating the system to fund their nefarious activities. What’s alarming is that this isn’t the first time that the company has been found to be illegally imposing extra charges on its customers on one pretext or another. A couple of years ago, the telecom operator had to pay $105 million to settle similar accusations of imposing unauthorized charges on its customers’ phone bills – a practice otherwise known as cramming.