AT&T Pays Florida AG $2.5M, Become Police In Industry
ADOTAS - The Florida Attorney General has done it again. AG Bill McCollum announced today that AT&T Mobility will be the first wireless company in the nation to “police representations made in internet advertising for cell phone content.”
The company will also make full restitutions to Florida consumers who were deceptively billed for “free” mobile phone content. Anonymous sources told Adotas that the amount of restitutions is well into the tens of millions of dollars range, on the order of $40-$50 million.” Additionally AT&T Mobility will be paying out $2.5 million to the Attorney General’s Office to fund the efforts towards reform across the industry and $500,000 towards consumer education on safe internet use. These payments are similar to donations made by World Avenue USA, AzoogleAds and Adteractive.
The cooperative agreement between the two entities will also create new model for the advertising billing of cell phone content. AG Bill McCollum stated “Consumers should never be billed for services they thought were free of charge. Today’s agreement establishes a precedent for wireless companies accepting responsibility for the way phone content is advertised on the internet and the manner in which charges are passed along to consumers. AT&T should be commended for being the first wireless company in the industry to offer this reform.”
Complaints filtered into the Florida AG’s CyberFraud Task Force that led to an investigation finding thousands of Florida AT&T Mobility users that had received charges on their cell phone bills for certain third party services that they didn’t authorize. These charges came mainly for ringtones and other services that were advertised as “free,” but in fact turned out to be costly monthly subscriptions for third-party content.
Industry insiders are also excited by what the reforms by AT&T mean to the market as a whole going forward. Don Mathis, President of AzoogleAds commented on the news to Adotas saying “This announcement from the Florida Attorney General underscores that there is a right way – and a wrong way, as evidenced by the specific examples provided in the Florida AG’s press release – to engage in providing mobile content to consumers and to market it. In the past, some companies relied on a perception of regulatory ambiguity to engage in practices that are deceptive to the consumer, and have bilked lots of money from unsuspecting people. Well, there is no ambiguity anymore. This settlement with AT&T sets a bright-line standard. You either comply with it, or you are on the wrong side of the law. This is an important step towards cleaning up the industry and leveling the playing field. If you are doing the right thing, this can only help you. If you are not, you are in trouble.”
Brad Ashwell, legislative advocate for the Florida Public Interest Research Group stated “This settlement comes at a time when the digital consumer is faced with new deceptive internet scams on a daily basis. It’s encouraging to see a corporation of AT&T’s magnitude taking responsibility for unfair charges and it is encouraging that the funds from this settlement will ensure that the Attorney General’s CyberFraud Task force continues protecting consumers in the virtual marketplace.”
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