AT&T fined $700,000; will refund overcharged customers

IDG News Service - AT&T has agreed to pay $700,000 and refund certain customers said to have been overcharged on smartphone plans, after the Federal Communications Commission found that some customers were moved to more expensive monthly plans without their consent.

From September, 2009, the operator began requiring smartphone subscribers to purchase a monthly data plan as a condition for receiving wireless voice service. But customers covered under a "grandfathering policy" were not required to move to a monthly plan unless they upgraded an old smartphone, or they opted for the monthly plan, in which case they also lost their special status.

Some AT&T smartphone subscribers who were eligible to be charged for data under a pay-per-use plan or had data blocked on their phones under the grandfathering policy were however moved to a monthly data plan by the operator, according to a consent decree posted on the FCC's website.

Shortly after AT&T began mechanized enforcement of its monthly data plan from Nov. 1, 2009, the FCC said it began receiving complaints from AT&T subscribers about the addition of monthly data plans to their accounts. Some of the complaining subscribers alleged that they were, or appeared to be, grandfathered subscribers who should not have been subject to AT&T's mandatory monthly data plan requirement, according to the consent decree. A grandfathered subscriber is one who used a smartphone with a pay-per-use data plan or a data block on AT&T's network, prior to Nov. 1, 2009.

Some consumers who replaced their old phones under warranty or insurance, or who moved to a new residence were switched to the monthly plans, even though AT&T had said the grandfathering policy would continue to apply in these situations, FCC said in a statement on Tuesday.

AT&T has agreed to pay the FCC $700,000 which is described as a "voluntary contribution" and also provide the option of a refund to grandfathered customers who were moved to the new monthly plan without their consent, to the extent of the difference between the monthly plan and the pay-per-use plan. The customers will also be given the option to move back to their original plan.

The excess charges that AT&T has agreed to refund to individual customers could be as much as $25 to $30 a month, depending on data use, FCC said.