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TALLAHASSEE - Accused of billing customers for ring tone services that were supposed to be free, AT&T Mobility, the nation's largest cell phone carrier, has agreed to refund more than $10 million to thousands of Florida consumers.
State Attorney General Bill McCollum said Friday that his office is pursuing similar settlements with other wireless providers, including Verizon, Sprint, Alltel and T-Mobile.
"We have not entered negotiations with them yet, but we will," McCollum said. "We will be asking them to do exactly what is being done by AT&T Mobility."
Advertised as a free service on the Internet, ring tones are often downloaded by teenagers. But a closer look at the fine print reveals charges ranging from $9.99 to $49.99 a month, McCollum said.
"They will download this thinking it's free, because the advertising that's on the Internet often says it's free," he said. "In many ways, it's fraudulent because it advertises this as free when it's not."
When the bill arrives, it's not always clear what the charge is for. In many cases, it's listed simply as a third-party charge.
Under the settlement, AT&T Mobility agreed to police third-party advertisers to make sure consumers are no longer misled. The company also agreed to make billing more transparent.
"It's going to say ring tones, and it's going to give them the opportunity to cancel," McCollum said.
Atlanta-based AT&T Mobility said it wasn't responsible for the deceptive advertising.
"This is not content that was offered or sold by AT&T," said company spokesman Marty Richter. "The agreement is voluntary. We've been in compliance with most of the stuff that's in this agreement for some time."
AT&T Mobility is the first cell phone company to provide such refunds and adopt strict standards for third-party advertisers. The company said it has taken steps to protect customers from misleading ads and billing statements.
"We are proud to lead the industry with this cooperative agreement to make sure our customers are only billed for services they agree to," Richter said.
Refund notices will be sent to AT&T customers during the next few weeks. The total refund will range from $10 million to $45 million, depending on the number of customers who claim they were wrongly billed.
"Because it's a rebate system, I suspect it will be closer to the $10 million figure," McCollum said.
Terms of the settlement also require AT&T Mobility to pay $2.5 million to the state to fight Internet fraud. The company will spend an additional $500,000 to teach consumers how to avoid being duped while surfing the Internet.
About 40 percent of the ring tone charges went to AT&T Mobility, McCollum said.
"They make a profit on all of that which is sold over the Internet," he said. "That's why they have agreed to do this."
Brad Ashwell, spokesman for the Florida Public Interest Research Group, a consumer advocacy organization, praised McCollum and his team of investigators for holding the nation's telecom giants accountable and warned consumers to be wary when using the Internet. While the Internet has created opportunities for bona fide entrepreneurs, it has also given criminals another tool to cheat unwitting consumers, he said.
"The digital marketplace is sort of a Wild West right now," Ashwell said.
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