With prompting from New York Attorney General Eliot Spitzer, AT&T has agreed to pay refunds to as many as 311,000 New Yorkers who were improperly billed.
As part of the settlement, AT&T Communications of New York will also reform its billing procedures, provide consumers with additional information on telephone services and pay $400,000 in penalties and costs.
"Communications companies need to do a better job of communicating with customers about bills for services," Spitzer said. "This settlement will reconcile improper billings, reform some billing practices and provide new information to help consumers make informed choices about telephone service."
The settlement follows a six-month investigation by Spitzer's office of AT&T's billing practices. The investigation began in January, after the Attorney General's office received hundreds of complaints from consumers who were billed for long distance telephone service that they neither requested nor used.
This was the result of a change in AT&T's billing policies in which the company sought to impose a monthly fee of $7.72 on "basic rate" customers. However, many of the consumers charged this monthly fee were not AT&T long distance customers at all.
Consumers who tried to correct this billing error by calling AT&T endured long waiting periods, were often given inaccurate information and were subjected to aggressive sales tactics. Even after receiving confirmation and documentation that the matter had been corrected, some consumers continued to receive bills and past due notices regarding their accounts.
Under the settlement, AT&T will do the following:
- Provide for restitution and credits for those who were incorrectly billed;
- Update and correct billing lists to exclude consumers who are not AT&T customers;
- Cease collection efforts for past-due accounts linked to monthly charge;
- Send a notice to all of its "basic rate" customers informing them of the terms of their service plan; and
- Advise customers on how to switch AT&T plans, change long-distance carriers, or cancel long-distance service completely.
Consumers have 45 days during which they may register a complaint and request reimbursement from the company.