DALLAS -- AT&T has agreed to pay nearly $7.8 million to settle government allegations of unauthorized third-party charges for directory assistance services not provided.
The Federal Communications Commission on Monday announced the settlement with the Dallas-based telecommunications giant. Billing for unauthorized charges is a practice known as "cramming."
An FCC statement says AT&T allowed scammers to charge some customers about $9 per month for a sham directory assistance service. The scheme was uncovered by federal agents investigating drug-related crimes and money laundering.
The FCC says AT&T received a fee from some companies that added the charges to customer bills but never provided the services.
AT&T will issue refunds, totaling $6.8 million, to current and former consumers who were charged the fee since 2012. AT&T also agreed to pay a $950,000 government fine.