AT&T To Pay $18 Million For Overcharging Departing Wireless Customers

It appears telecommunications giant AT&T is a bad breaker-upper.

The company has agreed to pay $18 million to wireless customers who say they were unfairly charged high fees when they ended their service contracts with the company. The agreement settles legal claims brought by former and current AT&T users and applies to customers as far back as 1998, according to an Associated Press report.

AT&T customers who were charged an early-termination fee from the company after they cancelled a two-year service contract just before it was to expire stand to get back as much as $140, the AP reports. Customers who terminated their contracts earlier in their contract periods would get less money back.

Even former AT&T customers who were never charged an early termination fee can benefit from the settlement. Those customers can get an AT&T long distance phone card with up to 200 minutes, or if they currently have a service contract with AT&T, they may choose to have the fee amount changed from a $175 flat rate to one that is prorated, according to the AP.

AT&T used to charge a flat-rate early-termination fee of $175, regardless of how long the customer had left on the contract. The company started prorating those fees in 2008, meaning customers who cancelled their service after a year paid less money to get out of the deal.

Other telecommunications companies have agreed to similar legal settlements with customers over early-termination fees. In August 2009, Sprint Nextel Corp. agreed to pay $17.5 million to settle the same kinds of claims from its customers.

This week, the Federal Communications Commission asked AT&T, Sprint, Verizon Communications Inc., T-Mobile USA Inc., and Google Inc. to reconsider whether they are giving customers enough notice about the fees they will be charged.

For its part, AT&T said it denies any wrongdoing in the handling of its early-termination fees, but said it agreed to pay the settlement in order to avoid future litigation, according to the AP.

AUTHOR: tgrenda