WASHINGTON, Feb. 29, 2008
Breaking Down The Ringtone Settlement
AT&T Agrees To Changes After Cell-Phone Fraud Investigation, But What Does It Mean For Consumers?
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Play CBS Video Video 'Cramming' Charges Raise Alarm Cell phone companies profit from third party companies who charge their customers for things like ring tones and jokes, then make it difficult for them to stop paying. Sharyl Attkisson reports.
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Video AT&T Settles Ringtone Fraud AT&T agreed to pay thousands of consumers for unauthorized ringtone and text message charges, and new cases are emerging against other cell phone carriers. Sharyl Attkisson has an exclusive report.
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(CBS/iStockphoto)
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Investigative correspondent Sharyl Attkisson keeps watch on how the government is spending your tax dollars
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• Millions In Pills, Flushed
• Murtha's Defense Earmarks Questioned
• Bailout Banks Hike Up Charges
• Student Loan Charity Under Fire
• Bailout Money To Tax Havens
• Big Bank's Bailout Spending Spree
• The Impossible-To-Track Bailout
• Where Did The Bailout Billions Really Go?
• Pension System A Runaway Train
• Parking Garage To Nowhere
• Did D.C. Bribery Cost Troop Lives?
• Teach For America Gets Schooled
• USDA Jobs A Day At The Beach?
• From Lawmaker To Lobbyist
• Flying The Empty Skies
• Fishing For Tax $$
• Millions In Pills, Flushed
AT&T Wireless is the first big phone company to settle a ringtone-fraud investigation - where AT&T allowed advertisers to put out misleading ads, then billed customers for ringtones they didn't want or thought were free.
Under the settlement, AT&T agrees to:
"So obviously the representation you're getting - "complimentary ringtones" - on this page is completely false," one investigator in Tallahassee, Fla., said.
Florida investigators decided to build a case after following the ringtone money trail straight to some trusted household names and decided to build a case.
"I'll tell you the thing that really convinced me is when I learned that AT&T Mobility and the other wireless providers, that they're getting 40 to 45 percent of the profit," said Florida attorney general Bill McCollum. "They are actually making the money. It's not as though they're innocent parties in this."
He said AT&T will also refund an estimated $40 million dollars to customers who got cheated. That's just in Florida alone.
Read more at Couric & Co.: Ring, Ring … Gotcha!
It's taken four short years for the ringtone market to appear from nowhere and explode into a billion dollar market.
Just as quickly, as we reported last week, scam artists found a way to tap in, often with alluring but deceptive ads.
AT&T today told us the settlement was voluntary and that it's leading the way in the industry.
While AT&T may not admit wrongdoing, it will pay the $40 million and change its ways.
Florida today announced it's also investigating Verizon and has more than a dozen open cases against ringtone companies and advertisers - including ones run by the former King of Spam Scott Richter. They were the subjects of our Follow the Money report.
The other cell phone companies aren't off the hook either. The Florida attorney general is now targeting all the companies that use similar sales tactics - including Sprint/Nextel, Alltel and T-Mobile.
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Add a Comment
- I thought this comment important so I repeated it.
http://web.cbsmobile.com/content/web2/dy
n/home?affiliate=cbsmobile
This is CBS!!!! They sell ringtone subscriptions for $6.99 and $9.99!!!!!
So when Mrs Sharyl Attkisson follows the money at the end she arrives at home!
But there is more... This industry is regulated by the Mobile Marketing Association.
The MMA basically define the rules on subscription flow, advertising policies etc etc... And guess who is in the Board of MMA?
Cyriac Roeding, EVP Wireless CBS Corp. (Global Chairman).
AGAIN CBS!!!
Come on guys, be serious!!!! - Reply to this comment
- great comment Scott !!!!
- Reply to this comment
- http://web.cbsmobile.com/content/web2/dyn/home?affiliate=cbsmobile
This is CBS!!!! They sell ringtone subscriptions for $6.99 and $9.99!!!!!
So when Mrs Sharyl Attkisson follows the money at the end she arrives at home!
But there is more... This industry is regulated by the Mobile Marketing Association.
The MMA basically define the rules on subscription flow, advertising policies etc etc... And guess who is in the Board of MMA?
Cyriac Roeding, EVP Wireless CBS Corp. (Global Chairman).
AGAIN CBS!!!
Come on guys, be serious!!!! - Reply to this comment
- This is CBS!!!! They sell ringtone subscriptions for $6.99 and $9.99!!!!!
So when Mrs Sharyl Attkisson follows the money at the end she arrives at home!
But there is more... This industry is regulated by the Mobile Marketing Association.
The MMA basically define the rules on subscription flow, advertising policies etc etc... And guess who is in the Board of MMA?
Cyriac Roeding, EVP Wireless CBS Corp. (Global Chairman).
AGAIN CBS!!!
Come on guys, be serious!!!! - Reply to this comment
- But they are so patriotic. AT&T that is.
- Reply to this comment
- I have always posited that the nation''s vital telecommunications infrastructure, along with interstate transportation, education, and health care services was too important to be left to the corrupt whims of greedy, for profit private entities.
- Reply to this comment
- CBS reports, "AT&T today told us the settlement was voluntary and that it''s leading the way in the industry."
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AT&T service, wireless or residential, is widely known as one of the most aggressive sales groups, sometimes creating unpleasant experiences for the phone consumer.
A few years ago, I was "slammed" by an AT&T phone service promoter when I declined the offer to switch to AT&T-- meaning, I was signed up without my authorization to AT&T residential service, and my number was automatically brought into the AT&T fold of customers.
In restitution, AT&T paid all my charges to restore phone service the way it had been, but I suspect the practice is widespread in the high-pressure sales environment of AT&T and other, similar companies.
Thus, the Ringtone scandal "rings" true-- in this case, a single bad apple created the company''s unsavory reputation with me. Your mileage may vary. - Reply to this comment
- GET SPRINT THEY CHEATED ME FOR MONTHS, I KEPT CALLING THEM AND ASKING THEM TO STOP THE FAKE CHARGES FOR RING TONES I NEVER ORDERED OR USED - I HAVE NEVER USED ANY RINGTONE THAT DID NOT COME WITH MY PHONE. SPRINT TOLD ME THEY COULD NOT STOP THE BILLING...THEY SHOULD BE PROSECUTED FOR THEFT - NOT GIVEN A FINE - THROW THEM IN JAIL!!!!
- Reply to this comment
