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November 08, 2012

FCC Fines AT&T $700,000 for Switching PAYG Customers to Monthly Contracts

AT&T booted its long term pay-as-you-go (PAYG) customers, switching them to monthly tariffs, and now the company is being fined for the move.

The Federal Communications Commission (FCC) charged AT&T with turning the tables unexpectedly and unfairly on what can be called its “grandfathered subscribes,” who had previously been assured they could continue as PAYG customers.

This switch from AT&T is costing their PAYG customers money, and the FCC believes AT&T should make it up by paying as well. 

Image via Shutterstock

FCC chairman Julius Genachowski said, “Today’s action sends a clear signal that wireless carriers can’t wrongfully charge customers. These strong FCC accountability measures will ensure customers are not over-charged. I am pleased that AT&T is taking the appropriate steps to resolve this issue.”

The fine that AT&T has agreed to pay is $700,000, which was calculated based on the increased payment that previous PAYG customers were faced with.

According to the FCC, PAYG customers could have been faced with increased payments of a steep $25 to $30 a month.

As the switch was instituted three years ago in November of 2009, it has been a long time coming for the customers involved in getting some sort of recognition from AT&T of their reported wrongdoing, and be paid back in return.

Even the investigation was hard-won, as the FCC only began looking into the issue last year, after a number of consumer complaints came in on the matter.

Michele Ellison, chief of the FCC’s Enforcement Bureau, said, “We strongly encourage AT&T subscribers to check their bills closely and contact the company if they spot any overcharges related to wireless data.”

The main purpose of the fine is, according to Ellison, to put “precious dollars back in the pockets of consumers, where they belong.”

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