AT&T to pay $700,000 fine and refund wireless customers over billing error

AT&T has agreed to pay a $700,000 fine to the U.S. Treasury for unfairly forcing pay-as-you-go wireless data customers into monthly data plans. The wireless provider has also agreed to refund the customers who were affected, and to return them to their grandfathered-in pay-as-you-go plans (if they’re still eligible).

In 2009, AT&T started requiring that all customers purchasing new smartphones also purchase a monthly subscription-based data plan. However, AT&T assured its existing customers on pay-as-you-go data plans that their plans would be protected and grandfathered-in indefinitely. So long as existing customers did not purchase new AT&T-subsidized smartphones, their pay-as-you-go plans were (supposedly) protected.

But it turns out that some grandfathered-in customers were still forced into monthly data plan subscriptions, which cost around $30/month. This happened when customers replaced old handsets using a warranty or insurance, or when customers moved to different parts of the United States. AT&T specifically promised that such situations – replacing old handsets or moving to a different part of the country – would not affect customers’ data plans.

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According to AT&T, the consent decree involves less than 0.03 percent of its customers. AT&T spokesman Marty Richter tells CNETthat the company had discovered and corrected the problem by November 2010, and had given refunds to customers who had contacted the company.

The Federal Communications Commission (FCC) began investigating customer complaints about a year ago. As a result of the investigations, AT&T has signed a consent decree (PDF) in which it has agreed to pay a $700,000 fine and refund affected customers. The company has also agreed to revert affected customers’ plans back to pay-as-you-go data plans if they are still eligible – that is, if they have not purchased a new AT&T-subsidized smartphone.

“Today’s action sends a clear signal that wireless carriers can’t wrongfully charge customers,” FCC Chairman Julius Genachowski said in a statement. “These strong FCC accountability measures will ensure customers are not over-charged.”

As part of the consent decree, AT&T will be providing a bill-page notice to affected customers. The notice will offer the customer a refund and will give them the option of switching back to their pay-as-you-go plan.

Still, if you’re an AT&T customer it’s a good idea to go back and check your records – don’t just sit around and wait for the company to offer up a refund. Remember, this only affects you if you at one point had an AT&T pay-as-you-go plan.

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