Click here for Adobe Acrobat version
Click here for Microsoft Word version
********************************************************
NOTICE
********************************************************
This document was converted from Microsoft Word.
Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.
All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.
Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.
If you need the complete document, download the
Microsoft Word or Adobe Acrobat version.
*****************************************************************
Federal Communications Commission DA 16-771
Before the
Federal Communications Commission
Washington, DC 20554
In the Matter of
AT&T Services, Inc.
)
)
)
)
)
File No.: EB-TCD-15-00019021
Acct. No.: 201632170006
FRN: 0018716266
ORDER
Adopted: August 8, 2016 Released: August 8, 2016
By the Chief, Enforcement Bureau:
1. The Enforcement Bureau (Bureau) of the Federal Communications Commission has
entered into a Consent Decree to resolve its investigation into whether AT&T Services, Inc. (AT&T)
placed unauthorized third-party charges on its customers’ wireline telephone bills, a practice commonly
known as cramming. Cramming is an unjust and unreasonable practice that results in consumers paying
for services they never requested and expending significant time and resources to reverse unauthorized
charges.
2. AT&T provides telecommunications services to consumers throughout the United States.
AT&T bills its customers not only for its own products and services, but also for the products and
services of numerous third parties. In this case, AT&T contracted with two Cleveland-area companies,
Discount Directory, Inc. (DDI) and Enhanced Telecommunications Services (ETS) (collectively, the
Companies) to bill customers approximately $9 per month for the Companies’ purported “directory
assistance service.” In return, AT&T received a fee for each charge it placed on its customers’ bills for
the Companies.
3. In May 2015, while investigating the Companies’ principals for drug-related crimes and
money laundering, the United States Drug Enforcement Administration uncovered that DDI and ETS
were sham operations that never provided any directory assistance service to the customers billed by
AT&T. The Companies’ principals told law enforcement that they submitted fake service charges for
thousands of AT&T customers (mostly small businesses) over a multiyear period.1 Although it bore
ultimate responsibility for the charges placed on its customers’ bills, AT&T never required proof from the
Companies that they obtained customer authorizations to be billed for their service and the record shows
that the Companies never obtained any such customer authorizations. In addition, AT&T ignored a
number of red flags that the charges were unauthorized, including thousands of charges submitted by the
Companies for nonexistent, disconnected, or otherwise “unbillable” accounts.
4. To settle this matter, AT&T will issue refunds to all consumers charged for the sham
directory assistance subscription service since January 2012, implement a compliance plan to protect
consumers from unauthorized charges, and pay a $950,000 civil penalty. The Consent Decree also
requires AT&T to cease billing for third-party products and services on its wireline bills, with certain
exceptions.2 AT&T must implement a compliance plan to ensure that its customers have authorized the
1 See United States v. $16,765.00 in U.S. Currency, et al, Complaint in Forfeiture, U.S. District Court, Northern
District of Ohio, Eastern Division, filed May 22, 2015 (file no. 1:15-cv-01036-CAB) paras. 29-77.
2 In March 2012, AT&T informed the Senate Committee on Commerce, Science & Transportation that it would
restrict third-party billing to “(i) telecommunications services; (ii) services or goods sold by any third-party vendor
that has a direct contractual arrangement for the joint or cooperative sale of such services or goods with AT&T; or
Federal Communications Commission DA 16-771
2
services for which they are billed and file regular reports with the Bureau to track its compliance with the
Consent Decree and its consumer protection obligations.
5. After reviewing the terms of the Consent Decree and evaluating the facts before us, we
find that the public interest would be served by adopting the Consent Decree and terminating the
referenced investigation into AT&T’s compliance with Section 201(b) of the Communications Act of
1934, as amended (Act).3
6. In the absence of material new evidence relating to this matter, we do not set for hearing
the question of AT&T’s basic qualifications to hold or obtain any Commission license or authorization.4
7. Accordingly, IT IS ORDERED that, pursuant to Section 4(i) of the Act5 and the
authority delegated by Sections 0.111 and 0.311 of the Commission’s rules,6 the attached Consent Decree
IS ADOPTED and its terms incorporated by reference.
8. IT IS FURTHER ORDERED that the above-captioned matter IS TERMINATED.
9. IT IS FURTHER ORDERED that a copy of this Order and Consent Decree shall be
sent by first class mail and certified mail, return receipt requested, to Jeanine Poltronieri, Assistant Vice
President, Federal Regulatory, AT&T Services, Inc., 1120 20th Street, NW, Suite 1000, Washington, DC
20036.
FEDERAL COMMUNICATIONS COMMISSION
Travis LeBlanc
Chief
Enforcement Bureau
(iii) contributions to any charitable organization subject to Section 501(c)(3)” and goods and services provided by
AT&T affiliates and those “billed by or through AT&T Mobility.” See Letter to The Honorable John D.
Rockefeller, Chairman, Committee on Commerce, Science & Transportation, from AT&T, March 28, 2012.
Nothing in this Consent Decree is intended to modify AT&T’s prior commitment to the Senate nor should it be
construed as FCC approval to modify such commitment. In October 2014, the Bureau entered into a Consent
Decree with AT&T Mobility LLC to resolve an investigation into allegations that the company billed wireless
customers for unauthorized third-party subscriptions and premium text messaging services. AT&T Mobility LLC,
Order and Consent Decree, 29 FCC Rcd 11803 (EB 2014). Nothing in this Consent Decree abridges, enlarges, or
modifies any obligation contained in the 2014 settlement reached with AT&T Mobility.
3 47 U.S.C. § 201(b).
4 See 47 CFR § 1.93(b).
5 47 U.S.C. § 154(i).
6 47 CFR §§ 0.111, 0.311.
Federal Communications Commission DA 16-771
Before the
Federal Communications Commission
Washington, DC 20554
In the Matter of
AT&T Services, Inc.
)
)
)
)
)
File No.: EB-TCD-15-00019021
Acct. No.: 201632170006
FRN: 0018716266
CONSENT DECREE
1. The Enforcement Bureau of the Federal Communications Commission and AT&T Services,
Inc., by their authorized representatives, hereby enter into this Consent Decree for the purpose of
terminating the Enforcement Bureau’s investigation into whether AT&T Services, Inc. violated Section
201(b) of the Communications Act of 1934, as amended, by placing unauthorized third-party charges on
its customers’ wireline telephone bills (a practice commonly referred to as cramming).
I. DEFINITIONS
2. For the purposes of this Consent Decree, the following definitions shall apply:
(a) “Act” means the Communications Act of 1934, as amended.1
(b) “Adopting Order” means an order of the Bureau adopting the terms of this Consent
Decree without change, addition, deletion, or modification.
(c) “AT&T” means AT&T Services, Inc., its subsidiary or affiliate incumbent local
exchange carriers (ILECs2), their successors or assigns, and any subsidiary or
affiliate insofar as it engages in the placement of Third-Party Charges on a Bill for
the provision of a telephone exchange service.
(d) “Bill” means a Consumer’s invoice for wireline telephone exchange services,
whether in electronic, paper, or any other form. “Billing,” “Billed,” or other use of
the defined term incorporates the definition of Bill.
(e) “Block” means a restriction placed on a Consumer’s account that prevents one or
more lines on the account, as designated by the Consumer, from being Billed for
recurring monthly charges for Third-Party Products. “Blocking” or other uses of the
defined term incorporate the definition of “Block.”
(f) “Bureau” means the Enforcement Bureau of the Federal Communications
Commission.
(g) “Clear and Conspicuous” means a statement is disclosed in such size, color, contrast,
location, duration, and/or audibility that it is readily noticeable, readable,
1 47 U.S.C. § 151 et seq.
2 The AT&T ILEC subsidiaries include: Illinois Bell Telephone Company d/b/a AT&T Illinois; Indiana Bell
Telephone Company Incorporated d/b/a AT&T Indiana; Michigan Bell Telephone Company d/b/a AT&T Michigan;
The Ohio Bell Telephone Company d/b/a AT&T Ohio; Wisconsin Bell, Inc. d/b/a AT&T Wisconsin; Pacific Bell
Telephone Company d/b/a AT&T California; Nevada Bell Telephone Company d/b/a AT&T Nevada; Southwestern
Bell Telephone Company d/b/a AT&T Arkansas, AT&T Kansas, AT&T Missouri, AT&T Oklahoma, and AT&T
Texas; and BellSouth Telecommunications, LLC d/b/a AT&T Alabama, AT&T Florida, AT&T Georgia, AT&T
Kentucky, AT&T Louisiana, AT&T Mississippi, AT&T North Carolina, AT&T South Carolina, and AT&T
Tennessee. The Companies submitted charges for billing only through Illinois Bell Telephone Company, The Ohio
Bell Telephone Company, and AT&T Texas.
Federal Communications Commission DA 16-771
2
understandable, and, with respect to audio, capable of being heard. A statement may
not contradict or be inconsistent with any other information with which it is
presented. If a statement modifies, explains, or clarifies other information with
which it is presented, then the statement must be presented in proximity to the
information it modifies, explains, or clarifies in a manner that is readily noticeable,
readable, and understandable, and not obscured in any manner. In addition:
i. An audio disclosure must be delivered in a volume and cadence sufficient for a
consumer to hear and comprehend it;
ii. A text message, television, or Internet disclosure must be of a type size, location,
and shade and remain on the screen for a duration sufficient for a consumer to
read and comprehend it based on the medium being used; and
iii. Disclosures in a print advertisement or promotional material, including, but
without limitation, a point of sale display or brochure materials directed to
consumers, must appear in a type size, contrast, and location sufficient for a
consumer to read and comprehend them.
(h) “Commission” and “FCC” mean the Federal Communications Commission and all of
its bureaus and offices.
(i) “Communications Laws” means collectively, the Act, the Rules, and the published
and promulgated orders and decisions of the Commission to which AT&T is subject
by virtue of its business activities, including but not limited to Section 201(b) of the
Act.
(j) “Company” or “Companies” means Discount Directory, Inc. (DDI) and/or Enhanced
Telecommunications Services (ETS).
(k) “Compliance Plan” means the compliance obligations, program, and procedures
described in this Consent Decree at paragraph 16.
(l) “Consumer” means a current or former customer, subscriber, or purchaser of
Products for which Third-Party Charges are placed on the Consumer’s AT&T Bill,
whether that Person is responsible for paying the Bill or has a line or device that is
Billed to a shared account.
(m) “Designated Third-Parties” means the five companies (individually and/or
collectively) that satisfy at least one of the following:
i. as of January 1, 2016, provided (on its own or through a subsidiary) long-
distance telephone service as a Third-Party Product to Consumers and was a
publicly traded company headquartered in the United States; or
ii. provided (on its own or through a subsidiary) Third-Party Products to Consumers
for which, together with its Third Party affiliates, billings exceeded $3,500,000
during calendar year 2015 and, as of the Effective Date was a top-level parent
company with a rating of “A” from the Better Business Bureau.
(n) “Designated Third-Party Services” means operator assisted calling and inmate calling
Billed on a per-use basis (as opposed to a recurring or subscription basis), toll calls
Billed on a per-use basis (e.g., 10-10 + carrier identification code), and the two
business yellow pages services AT&T Billed for during calendar year 2015 (one
yellow pages service AT&T Billed for a company pursuant to a California state tariff
and the other yellow pages service AT&T Billed for a company in which AT&T
holds an ownership interest).
Federal Communications Commission DA 16-771
3
(o) “Effective Date” means the date by which both the Bureau and AT&T have signed
the Consent Decree.
(p) “Express Informed Consent” means an affirmative act or statement giving
unambiguous assent to be charged for the purchase of a Third-Party Product that is
made by a Consumer after receiving a Clear and Conspicuous disclosure of the
material terms of the offer.
(q) “Investigation” means the investigation commenced by the Bureau in File No. EB-
TCD-15-00019021 regarding whether AT&T violated Section 201(b) of the Act.
(r) “Newly Acquired Entities” means any entities AT&T acquires in the future.
(s) “Parties” means AT&T and the Bureau, each of which is a “Party.”
(t) “Person” shall have the same meaning as 47 U.S.C. § 153(39).
(u) “Product” means content, services, and/or equipment for which charges are placed on
the Consumer’s Bill by AT&T. The term “Product” excludes: contributions to
charities, candidates for public office, political action committees, campaign
committees, campaigns involving a ballot measure, or other similar contributions.
“Product” also excludes: co-branded, co-marketed, or white label products branded
by AT&T (including branding commonly associated with the AT&T family of
companies, for instance the AT&T globe), and products obtained by AT&T business
or government customers with at least 100 DS0-equivalent lines pursuant to a
telecommunications management contract with AT&T that authorizes AT&T to Bill
such business or government customer for products obtained from a Third Party.
“Product” also excludes equipment protection services, such as extended warranty
offerings or virus protection offerings, for equipment or services made available to
the customer by AT&T.
(v) “Redress Amount” means, for any individual Consumer, the sum of all Third-Party
Charges placed on the Consumer’s Bill for Products purportedly provided by the
Companies during the Redress Period, less any credit or refund for such charges
already provided to the Consumer by either AT&T or the Companies.
(w) “Redress Period” means January 1, 2012 through the Effective Date.
(x) “Rules” means the Commission’s regulations found in Title 47 of the Code of
Federal Regulations.
(y) “Third Party” or “Third Parties” means an entity or entities, other than AT&T or any
affiliate of AT&T, that purportedly and/or actually provides a Product to Consumers
for which Billing is made through AT&T’s Bills. “Third Party” and “Third Parties”
include billing aggregators and other Persons that contract with AT&T for the
placement of Third-Party Charges on Bills on behalf of other Third Parties.
(z) “Third-Party Charge” means a charge for a Third-Party Product placed on a
Consumer’s Bill.
(aa) “Third-Party Product” means a Product provided by a Third Party.
(bb) “Truth-In-Billing Rules” mean the Rules set forth at 47 CFR § 64.2400 et seq.
II. BACKGROUND
3. Section 201(b) of the Act states, in pertinent part, that “[a]ll charges, practices,
classifications, and regulations for and in connection with [interstate or foreign] communication service
[by wire or radio], shall be just and reasonable, and any such charge, practice, classification, or regulation
Federal Communications Commission DA 16-771
4
that is unjust or unreasonable is declared to be unlawful . . . .”3 The Commission has held that the
inclusion of unauthorized charges and fees on consumers’ telephone bills is an “unjust and unreasonable”
practice under Section 201(b) known as “cramming.”4
4. AT&T provides telecommunications services to consumers throughout the United States.
AT&T bills its customers not only for its own services, but also for the services of some Third Parties.
From as early as 2002, AT&T billed its customers for a monthly “directory assistance service”
purportedly provided by the Third Parties DDI and ETS. AT&T contracted directly with DDI and ETS
and, pursuant to these contracts, placed charges for these Companies’ purported services on its customers’
local AT&T telephone bills and AT&T received a billing fee for each such Third-Party Charge. The
Bureau avers, however, that AT&T’s customers did not authorize such services, and the Companies never
actually provided such services to AT&T’s customers.
5. Under the terms of their contracts with AT&T, the Companies were required to obtain
and verify the authorization to be billed for their service from the customers they asked AT&T to bill.
The contracts further stipulated that for each cramming complaint received, AT&T would charge the
Company named in the complaint a fee of $150. AT&T also implemented complaint thresholds that DDI
and ETS were required to stay under in order to continue with the billing arrangement and AT&T
required the Companies to self-report any cramming complaints against them to AT&T.
6. In March of 2015, the Drug Enforcement Administration (DEA) contacted the Bureau
regarding the DEA’s investigation of a drug and money laundering operation involving the principals of
DDI and ETS. DEA reported to the Bureau that, in the course of seizing drugs, cars, jewelry, gold, and
computers (totaling close to $3.4 million) from DDI and ETS’ principals and associates, DEA
investigators discovered financial documents related to a cramming scheme. DEA further stated that its
agents conducted numerous interviews with the key participants in the scheme, who described setting up a
scheme to bill thousands of consumers (largely small businesses) for a monthly “directory assistance
service” on their local AT&T telephone bills. DDI had informed AT&T in late January of 2015 of the
DEA investigation. AT&T thereafter contacted the DEA to obtain further information, and, after a
follow-up call in which the DEA informed AT&T about the criminal investigation into DDI and ETS,
AT&T made the decision, on February 17, 2015, to terminate its relationship with the Companies.
Although AT&T informed the Companies that their contracts would be terminated as of April 1, 2015,
the Companies submitted additional charges to AT&T following that date, which led to the inclusion of
some Third-Party Charges on Consumer Bills through May 2015.
7. Based on information provided by the DEA and its own investigation, the Bureau has
concluded that the cramming scheme worked as follows: pursuant to their contracts with AT&T, the
Companies submitted telephone numbers of AT&T customers to AT&T with instructions to bill those
customers monthly for a subscription to an unlimited directory assistance service. In some months,
AT&T rejected thousands of “unbillable” numbers that one of the Companies asked it to charge because
there were no accounts found for the customers, the customers had a Block on their accounts, the number
charged was for a coin-operated pay phone, the charge was submitted prior to the effective date of
service, the charge was submitted after service was disconnected, or the account charged was either resold
or ported to a service provider other than AT&T. According to AT&T, during the applicable period that
it was billing for the Companies, AT&T did not consider unbillable numbers to be an indicator for
3 47 U.S.C. § 201(b).
4 See, e.g., Preferred Long Distance, Inc., Forfeiture Order, 30 FCC Rcd 13711, 13718, para. 16 (2015); Bus. Disc.
Plan, Inc., Order of Forfeiture, 15 FCC Rcd 14461, 14469, para. 17 (2000); Long Distance Direct, Inc.,
Memorandum Opinion and Order, 15 FCC Rcd 3297, 3300, para. 9 (2000). Any assessment of an unauthorized
charge on a telephone bill or for a telecommunications service is an “unjust and unreasonable” practice under
Section 201(b) of the Act. See, e.g., Cent. Telecom Long Distance, Inc., Notice of Apparent Liability for Forfeiture,
29 FCC Rcd 5517, 5523, para. 14 (2014); U.S. Telecom Long Distance, Inc., Notice of Apparent Liability for
Forfeiture, 29 FCC Rcd 823, 829, para. 14 (2014); Consumer Telcom, Inc., Notice of Apparent Liability for
Forfeiture, 28 FCC Rcd 17196, 17202, para. 15 (2013).
Federal Communications Commission DA 16-771
5
identifying cramming. Although the Companies’ agreements with AT&T obligated them to obtain the
customers’ authorization to be billed for the service, the Bureau concludes that the Companies never
obtained any customer authorizations.
8. The Bureau further concludes that many customers never noticed the unauthorized
charges on their Bills. For consumers that noticed the unauthorized charges and complained to the
Companies, the Companies responded by issuing refunds for the unauthorized charges, but did not report
such complaints to AT&T. AT&T indicates that, by not reporting those complaints to AT&T, as the
Companies were obligated to do, the Companies were able to keep the number of cramming complaints
below the contractual thresholds that AT&T says would have triggered further investigation of the
possibility that the Companies were engaged in a cramming scheme and/or termination of the billing
arrangements.
9. The Bureau initiated the Investigation based on the referral from the DEA and its
concerns that AT&T, through the course of conduct above, violated Section 201(b) of the Act by
engaging in an unjust and unreasonable practice when it placed unauthorized Third-Party Charges on its
customers’ telephone Bills.
III. TERMS OF AGREEMENT
10. Adopting Order. The provisions of this Consent Decree shall be incorporated by the
Bureau in an Adopting Order.
11. Jurisdiction. For purposes of this Consent Decree only, AT&T agrees that the Bureau
has jurisdiction over it and the matters contained in this Consent Decree and has the authority to enter into
and adopt this Consent Decree.
12. Effective Date. The Parties agree that this Consent Decree shall become effective on the
Effective Date as defined herein. As of the Effective Date, the Parties agree that this Consent Decree
shall have the same force and effect as any other order of the Commission.
13. Termination of Investigation. In express reliance on the covenants and representations
in this Consent Decree and to avoid further expenditure of public resources, the Bureau agrees to
terminate the Investigation. In consideration for the termination of the Investigation, AT&T agrees to the
terms, conditions, and procedures contained herein. The Bureau further agrees that, in the absence of new
material evidence, it will not use the facts developed in the Investigation through the Effective Date, or
the existence of this Consent Decree, to institute, on its own motion, any new proceeding, formal or
informal, or take any action on its own motion against AT&T concerning the matters that were the subject
of the Investigation. The Bureau also agrees that, in the absence of new material evidence, it will not use
the facts developed in the Investigation through the Effective Date, or the existence of this Consent
Decree, to institute on its own motion any proceeding, formal or informal, or to set for hearing the
question of AT&T’s basic qualifications to be a Commission licensee or hold Commission licenses or
authorizations.5
14. Admission. The Parties agree for the purpose of this Consent Decree, and in express
reliance on the provisions of paragraph 13 herein, that paragraphs three through nine contain a true and
accurate description of the facts underlying the Investigation. The Parties further agree that this Consent
Decree does not constitute a legal finding regarding AT&T’s compliance or noncompliance with any law.
It is the intent of the Parties that this Consent Decree shall not be used as evidence or precedent against
AT&T in any action or proceeding, except an action to enforce this Consent Decree.
15. Compliance Officer. Within thirty (30) calendar days after the Effective Date, AT&T
shall designate a senior corporate manager with the requisite corporate and organizational authority to
serve as a Compliance Officer and to discharge the duties set forth below. The person designated as the
Compliance Officer shall be responsible for developing, implementing, and administering the Compliance
5 See 47 CFR § 1.93(b).
Federal Communications Commission DA 16-771
6
Plan and ensuring that AT&T complies with the terms and conditions of the Compliance Plan and this
Consent Decree. In addition to the general knowledge of the Communications Laws necessary to
discharge his or her duties under this Consent Decree, the Compliance Officer shall have specific
knowledge of Section 201(b), Commission notices and orders related to cramming, and the Truth-in-
Billing Rules prior to assuming his/her duties.
16. Compliance Plan. For purposes of settling the matters set forth herein, AT&T agrees
that it shall develop and implement a Compliance Plan designed to ensure future compliance with the
Communications Laws and with the terms and conditions of this Consent Decree. AT&T will implement,
at a minimum, the following procedures:
(a) Cease and Desist Third-Party Billing. Except as provided in paragraph 16(a)(i)
and (ii), AT&T shall cease and desist all Billing for Third-Party Products according
to the following schedule: As of the Effective Date, AT&T will not program any
new Third Parties into its Billing systems (i.e., not program new carrier identification
codes or other identifiers associated with a Third Party into its Billing systems).
Within fifteen (15) calendar days after the Effective Date, AT&T shall cease
accepting the submission of Third-Party Charges from entities for whom AT&T did
not Bill as of the Effective Date and initiate the process of terminating its Billing
relationships with Third Parties. AT&T thereafter shall continue to make reasonably
diligent efforts to terminate those relationships and prevent the appearance of a
Third-Party Charge on any Bill. To that end, AT&T shall make good faith efforts to
cease all Billing for Third-Party Products within one hundred twenty (120) calendar
days of the Effective Date, and it will monitor its Billing systems for any
miscellaneous missed Third-Party Charges such that on or before one hundred eighty
(180) calendar days after the Effective Date, AT&T shall cease and desist all Billing
for Third-Party Products.
i. AT&T may continue Billing its customers for: (1) the retail intra-LATA Toll
and inter-LATA Toll services of the Designated Third-Parties and their Third-
Party subsidiaries; and/or (2) the Designated Third-Party Services.
ii. AT&T may Bill for Third-Party Products purchased through an AT&T ordering
platform or an ordering platform of an entity majority-owned by AT&T Inc.
directly or indirectly, if, prior to Billing for any such Third-Party Product, it first
obtains the Express Informed Consent from the Person on whose Bill the Third-
Party Charge will be included or otherwise invoiced (Billed Party). AT&T must
also send the Billed Party a Clear and Conspicuous purchase confirmation
separate from the Billed Party’s Bill. AT&T shall send the purchase
confirmation prior to delivering the Bill to the Billed Party. Express Informed
Consent must be on a per Product basis (i.e., no blanket Express Informed
Consent to be Billed generally for products or services not reasonably identified
at the time of the Express Informed Consent or in the purchase confirmation).
(b) Billing for AT&T Affiliates. AT&T shall be liable for any unauthorized charges
that it bills on behalf of any AT&T affiliate. For purposes of this sub-paragraph
16(b), “bill” means an AT&T invoice for wireline telephone exchange services,
whether in electronic, paper, or any other form.
(c) Consumer Redress for Unauthorized Charges. AT&T shall provide every
Consumer it charged during the Redress Period for Third-Party Products purportedly
provided by the Companies with a refund or credit equal to the Redress Amount, as
provided below:
i. Current Customers. AT&T shall, within ninety (90) calendar days after the
Effective Date, issue a refund check or bill credit equal to the Redress Amount to
Federal Communications Commission DA 16-771
7
Consumers who are, as of the date of the refund or credit, current AT&T
customers.
ii. Former Customers. AT&T shall, within ninety (90) calendar days after the
Effective Date, mail a refund check for the Redress Amount to the last known
address (as determined using AT&T’s last billing record and software operated
by AT&T’s mailing vendor) to Consumers who are not, as of the date of the
refund or credit, current AT&T customers (Former Customers).
iii. Uncashed or Returned Checks. Refund checks mailed to Former Customers will
be valid if cashed within one hundred eighty (180) calendar days from the date
mailed. In any case where a check is uncashed or returned, sub-paragraph
16(c)(iv) shall govern.
iv. Good Faith Efforts and Missed Customers. AT&T will endeavor in good faith to
identify every Consumer entitled to a refund check or bill credit pursuant to
paragraph 16(c) and to make such refund or credit. The Parties agree that the
following process constitutes such good faith in attempting to locate and send
refund checks to Former Customers: (1) AT&T will provide to its mailing
vendor a refund check and a last known address for each Former Customer; (2)
AT&T’s mailing vendor will use software to verify the provided address against
data provided by the United States Postal Service; (3) AT&T’s mailing vendor
will transmit the check to either (a) the address provided by AT&T or (b) a
forwarding address detected using the software program; and (4) unless a check
is returned as undeliverable, if a check is not cashed within one hundred eighty
(180) days, AT&T will send a follow-up letter to the address to which the check
was sent providing the recipient the opportunity to receive a replacement check.
If the check continues to remain uncashed, AT&T will then follow applicable
state unclaimed property law procedures with respect to the check.
(d) Blocking and Consumer Information. To the extent there are Third-Party Charges
on a Bill, within one hundred twenty (120) calendar days of the Effective Date,
AT&T shall:
i. Offer Blocking at no charge to the Consumer, and make available toll blocking
service (for businesses) and call restriction service (for residential Consumers)
that will prevent Consumers from making long-distance calls subject to a toll
charge;
ii. Provide a Clear and Conspicuous disclosure about Third-Party Charges and
Block options in informational material provided to Consumers at or near the
time of subscribing to or activating AT&T service. Such disclosure shall be
provided in a context separate from the actual subscriber agreement document.
Such disclosure shall include or provide access to a description of Third-Party
Charges, how Third-Party Charges appear on Bills, and the option available to
Consumers to Block Third-Party Charges; and
iii. Include in the Third-Party Charge billing section required under the Truth-In-
Billing Rules a Clear and Conspicuous disclosure of a Consumer’s ability to
Block Third-Party Charges, including contact and/or access information that
Consumers may use to initiate such Blocking. If AT&T includes a Third-Party
Charge billing section for each line on the account, AT&T shall have the
option to include the disclosure of a Consumer’s ability to Block Third-Party
Charges in only the first Third-Party Charge billing section that appears on the
Bill, rather than in all Third-Party Charge billing sections.
Federal Communications Commission DA 16-771
8
(e) Consumer Contacts. When a Consumer contacts AT&T with regard to a Third-
Party Charge or a Block, AT&T shall satisfy each of the following:
i. Beginning no later than one hundred twenty (120) days after the Effective
Date, AT&T shall be able to provide account information related to Third Party
Charges for at least the prior twelve (12) months. For Newly Acquired
Entities, if such information is not available, AT&T shall have twelve (12)
months to come into compliance with respect to such entities, and while
coming into compliance respond to the Consumer’s inquiry within ten (10)
days using any available information.
ii. For any Consumer who claims he or she did not authorize a Third-Party
Charge incurred after the Effective Date, AT&T (1) will provide the Consumer
a full refund or credit of any and all disputed Third-Party Charges not
previously credited or refunded to the Consumer, or (2) may deny a refund
provided, that, AT&T has information demonstrating that the Consumer
provided his or her consent to the Third-Party Charge, offers to provide such
information to the Consumer, and, upon request, provides such information to
the Consumer, and provides the Consumer thirty (30) days to refute such
information from the time it is received by the Consumer. Where the
Consumer timely challenges the information, AT&T shall promptly consider
such information and either provide the Consumer with a refund or credit or
respond to the Consumer giving reasons why it rejects the Consumer’s
response. AT&T shall endeavor to provide such credit or other response
within fourteen (14) days and shall, in all events, provide the same within
twenty-one (21) days. In addition, with respect to claims disputing Third-Party
Charges incurred more than twelve (12) months prior to the date of the claim
where AT&T does not have information demonstrating that the Consumer
provided his or her consent to the Third-Party Charge, AT&T shall provide a
refund if Billing or other records evidencing the disputed Third-Party Charges
are (1) provided by the Consumer or (2) maintained by AT&T in active
systems or databases accessible to AT&T customer service representatives in
the ordinary course of business. The payment or non-payment by AT&T of
any money to a Consumer pursuant to the terms of this sub-paragraph is
without prejudice to any claim such Consumer may otherwise have under
applicable law or any claim AT&T may have under applicable law to offset
any amounts it pays to a Consumer pursuant to this sub-paragraph.
iii. If the Consumer claims that he or she did not authorize a Third-Party Charge,
and the Consumer is a current customer of AT&T, AT&T will offer the
Consumer the opportunity to Block future Third-Party Charges.
iv. Beginning no later than one hundred twenty (120) days after the Effective
Date, AT&T will not require the Consumer to first contact the Third Party in
order to receive a refund/credit of any claimed unauthorized Third-Party
Charge, although this paragraph does not prohibit asking the Consumer if he or
she has contacted the Third Party and/or if the Consumer has already received a
credit or refund from the Third Party for some or all of the claimed
unauthorized Third-Party Charge.
v. Beginning no later than one hundred twenty (120) days after the Effective
Date, in the event a Consumer disputes a Third-Party Charge was authorized,
until such time as AT&T has complied with the provisions of paragraph
16(e)(ii) of this Consent Decree, AT&T shall not (1) require the Consumer to
pay the disputed Third-Party Charge, including any related late charge or
Federal Communications Commission DA 16-771
9
penalty; (2) send the disputed Third-Party Charge to collection; (3) make any
adverse credit report based on non-payment of the disputed Third-Party
Charge; or (4) suspend, cancel, or take any action that may adversely affect the
Consumer’s telephone service or functionality for any reason related to non-
payment of any disputed Third-Party Charge. In any case where a Consumer
claims that a Third-Party Charge was not authorized and (a) AT&T has
initiated a process covered by (1)-(4) of this sub-paragraph, and (b) intends to
exercise or exercises its rights under paragraph 16(e)(ii)(2) to deny or
investigate the refund claim, AT&T shall inform the Consumer that AT&T is
reviewing the claim, that the Consumer does not have to pay the disputed
Third-Party Charge while it is being processed, and that AT&T will notify the
Consumer of the outcome of its review of the claim, and of the Consumer’s
ability to contest the outcome pursuant to the provisions of paragraph 16(e)(ii).
AT&T shall promptly reverse any actions covered by (1)-(4) of this sub-
paragraph once AT&T has completed such processing and complied with the
provisions of 16(e)(ii), if it determines that a refund is owed to the Consumer.
(f) Training. Within one hundred twenty (120) days after the Effective Date and at least
annually in each of the subsequent three years, AT&T shall conduct a training
program with its customer service representatives to administer the requirements of
this Consent Decree. Any Person who is assigned duties or otherwise becomes a
customer service representative with any responsibility for administering the
requirements of this Consent Decree but who has not received such training will be
subject to training prior to assuming those responsibilities or duties. It is
acknowledged that the process of training customer service representatives may
include monitored interactions with Consumers. To the extent that AT&T no longer
Bills for or permits Third-Party Charges on the Bills of Designated Third Parties and
the Designated Third-Party Services, AT&T will conduct one training program
within three (3) months of such cessation and will have no further obligation to
conduct training programs under this paragraph so long as AT&T does not Bill for
Designated Third Parties and the Designated Third-Party Services or permit Third-
Party Charges on Consumers’ Bills.
(g) Cooperation with Bureau. AT&T shall, for at least four (4) years after the
Effective Date, designate a contact to whom the Bureau may provide information
regarding any concerns about unauthorized Third-Party Charges, and from whom the
Bureau may request information and assistance in investigations. Such information
and assistance shall include information regarding the identity of Third Parties
placing Third-Party Charges on AT&T’s Bills, revenue from such Third-Party
Charges, refunds provided relating to the Third-Party Charges, any audits conducted
of the Third Party (to the extent not protected by attorney-client or attorney work
product privileges), and any applications or other information provided by the Third
Party, to the extent that AT&T has access to such information. AT&T shall provide
such information within a reasonable period, to the extent such information is in
AT&T’s possession or control, and shall cooperate in good faith with such requests,
including investigating any reports of unauthorized Third-Party Charges AT&T
receives from the Bureau. Information will be considered in AT&T’s “control” if
AT&T has a contractual or other legal right to obtain the information from a Third
Party, unless good faith efforts by AT&T to obtain such information are
unsuccessful.
17. Reporting Noncompliance. For at least four (4) years from the Effective Date, AT&T
shall report any noncompliance with the terms and conditions of this Consent Decree within fifteen (15)
calendar days after discovery of such noncompliance. Such reports shall include a detailed explanation
Federal Communications Commission DA 16-771
10
of: (i) each instance of noncompliance; (ii) the steps that AT&T has taken or will take to remedy such
noncompliance; (iii) the schedule on which such remedial actions will be taken; and (iv) the steps that
AT&T has taken or will take to prevent the recurrence of any such noncompliance. All reports of
noncompliance shall be submitted to Richard A. Hindman, Chief, Telecommunications Consumers
Division, Enforcement Bureau, Federal Communications Commission, Washington DC 20554, with a
copy submitted electronically to Johnny.Drake@fcc.gov.
18. Compliance Reports. AT&T shall file compliance reports with the Commission one
hundred fifty (150) calendar days after the Effective Date, twelve (12) months after the Effective Date,
twenty-four (24) months after the Effective Date, thirty-six (36) months after the Effective Date, and
forty-eight (48) months after the Effective Date.
(a) Each Compliance Report shall include a detailed description of AT&T’s efforts
during the relevant period to comply with the terms and conditions of this Consent
Decree. In addition, each Compliance Report shall include a certification by the
Compliance Officer, as an agent of and on behalf of AT&T, stating that the
Compliance Officer has personal knowledge that AT&T: (i) has established and
implemented the Compliance Plan; and (ii) is not aware of any instances of
noncompliance with the terms and conditions of this Consent Decree, including the
reporting obligations set forth in paragraph 17 of this Consent Decree.
(b) The Compliance Officer’s certification shall be accompanied by a statement
explaining the basis for such certification and shall comply with Section 1.16 of the
Rules and be subscribed to as true under penalty of perjury in substantially the form
set forth therein.6
(c) If the Compliance Officer cannot provide the requisite certification, the Compliance
Officer, as an agent of and on behalf of AT&T, shall provide the Commission with a
detailed explanation of the reason(s) why and describe fully: (i) each instance of
noncompliance; (ii) the steps that AT&T has taken or will take to remedy such
noncompliance, including the schedule on which proposed remedial actions will be
taken; and (iii) the steps that AT&T has taken or will take to prevent the recurrence
of any such noncompliance, including the schedule on which such preventive action
will be taken.
(d) All Compliance Reports shall be submitted to Richard A. Hindman, Chief,
Telecommunications Consumers Division, Enforcement Bureau, Federal
Communications Commission, Washington DC 20554, with a copy submitted
electronically to Johnny.Drake@fcc.gov.
19. Termination Date. The requirements set forth in sub-paragraph 16(a)(ii) shall expire
seven (7) years after the Effective Date. Unless stated otherwise elsewhere in the Consent Decree, the
requirements set forth in paragraphs 15 through 18 (excluding 16(a)(ii)) of this Consent Decree shall
expire six (6) years after the Effective Date.
20. Section 208 Complaints; Subsequent Investigations. Nothing in this Consent Decree
shall prevent the Commission or its delegated authority from adjudicating complaints filed pursuant to
Section 208 of the Act7 against AT&T or its affiliates for alleged violations of the Act, or for any other
type of alleged misconduct, regardless of when such misconduct took place. The Commission’s
adjudication of any such complaint will be based solely on the record developed in that proceeding.
Except as expressly provided in this Consent Decree, this Consent Decree shall not prevent the
6 47 CFR § 1.16.
7 47 U.S.C. § 208.
Federal Communications Commission DA 16-771
11
Commission from investigating new evidence of noncompliance by AT&T with the Communications
Laws.
21. Civil Penalty. AT&T will pay a civil penalty to the United States Treasury in the
amount of nine hundred fifty thousand dollars ($950,000) within thirty (30) calendar days after the
Effective Date. AT&T shall send electronic notification of payment to Johnny.Drake@fcc.gov on the
date said payment is made. The payment must be made by check or similar instrument, wire transfer, or
credit card, and must include the Account Number and FRN referenced above. Regardless of the form of
payment, a completed FCC Form 159 (Remittance Advice) must be submitted.8 When completing the
FCC Form 159, enter the Account Number in block number 23A (call sign/other ID) and enter the letters
“FORF” in block number 24A (payment type code). Below are additional instructions that should be
followed based on the form of payment selected:
• Payment by check or money order must be made payable to the order of the Federal
Communications Commission. Such payments (along with the completed Form 159) must be
mailed to Federal Communications Commission, P.O. Box 979088, St. Louis, MO 63197-
9000, or sent via overnight mail to U.S. Bank – Government Lockbox #979088,
SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO 63101.
• Payment by wire transfer must be made to ABA Number 021030004, receiving bank
TREAS/NYC, and Account Number 27000001. To complete the wire transfer and ensure
appropriate crediting of the wired funds, a completed Form 159 must be faxed to U.S. Bank
at (314) 418-4232 on the same business day the wire transfer is initiated.
• Payment by credit card must be made by providing the required credit card information on
FCC Form 159 and signing and dating the Form 159 to authorize the credit card payment.
The completed Form 159 must then be mailed to Federal Communications Commission, P.O.
Box 979088, St. Louis, MO 63197-9000, or sent via overnight mail to U.S. Bank –
Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO
63101.
Questions regarding payment procedures should be addressed to the Financial Operations Group Help
Desk by phone, 1-877-480-3201, or by e-mail, ARINQUIRIES@fcc.gov.
22. Waivers. As of the Effective Date, AT&T waives any and all rights it may have to seek
administrative or judicial reconsideration, review, appeal or stay, or to otherwise challenge or contest the
validity of this Consent Decree and the Adopting Order. AT&T shall retain the right to challenge
Commission interpretation of the Consent Decree or any terms contained herein. If either Party (or the
United States on behalf of the Commission) brings a judicial action to enforce the terms of the Consent
Decree or the Adopting Order, neither AT&T nor the Commission shall contest the validity of the
Consent Decree or the Adopting Order, and AT&T shall waive any statutory right to a trial de novo.
AT&T hereby agrees to waive any claims it may otherwise have under the Equal Access to Justice Act9
relating to the matters addressed in this Consent Decree.
23. Severability. The Parties agree that if any of the provisions of the Consent Decree shall
be held unenforceable by any court of competent jurisdiction, such unenforceability shall not render
unenforceable the entire Consent Decree, but rather the entire Consent Decree shall be construed as if not
containing the particular unenforceable provision or provisions, and the rights and obligations of the
Parties shall be construed and enforced accordingly.
8 An FCC Form 159 and detailed instructions for completing the form may be obtained at
http://www.fcc.gov/Forms/Form159/159.pdf.
9 See 5 U.S.C. § 504; 47 CFR §§ 1.1501–1.1530.
Federal Communications Commission DA 16-771
12
24. Invalidity. In the event that this Consent Decree in its entirety is rendered invalid by any
court of competent jurisdiction, it shall become null and void and may not be used in any manner in any
legal proceeding.
25. Subsequent Rule or Order. The Parties agree that if any provision of the Consent
Decree conflicts with any subsequent Rule or Order adopted by the Commission (except an Order
specifically intended to revise the terms of this Consent Decree to which AT&T does not expressly
consent) that provision will be superseded by such Rule or Order.
26. Successors and Assigns. AT&T agrees that the provisions of this Consent Decree shall
be binding on its successors, assigns, and transferees.
27. Final Settlement. The Parties agree and acknowledge that this Consent Decree shall
constitute a final settlement between the Parties with respect to the Investigation.
28. No Applicability to AT&T Mobility LLC. Nothing in this Consent Decree shall apply
or shall be construed to apply to AT&T Mobility LLC, nor shall anything in this Consent Decree abridge,
enlarge, or modify any obligation contained in the AT&T Mobility LLC consent decree reported at 29
FCC Rcd 11803 (EB 2014).
29. Modifications. This Consent Decree cannot be modified without the advance written
consent of both Parties.
30. Paragraph Headings. The headings of the paragraphs in this Consent Decree are
inserted for convenience only and are not intended to affect the meaning or interpretation of this Consent
Decree.
31. Authorized Representative. Each Party represents and warrants to the other that it has
full power and authority to enter into this Consent Decree. Each person signing this Consent Decree on
behalf of a Party hereby represents that he or she is fully authorized by the Party to execute this Consent
Decree and to bind the Party to its terms and conditions.
Federal Communications Commission DA 16-771
13
32. Counterparts. This Consent Decree may be signed in counterpart (including
electronically or by facsimile). Each counterpart, when executed and delivered, shall be an original, and
all of the counterparts together shall constitute one and the same fully executed instrument.
________________________________
Travis LeBlanc
Chief
Enforcement Bureau
________________________________
Date
________________________________
Adrienne Scott
Vice President – Wholesale Strategy & Solutions
AT&T
________________________________
Date