AT&T banned from charging when cell phones are stolen

SACRAMENTO
October 10, 2007 11:36am

AT&T Mobility (formerly Cingular) has signed an agreement with the state of California that forbids it from charging customers for any calls made after their phones are lost or stolen.

California Attorney General Edmund Brown Jr. alleged that the company violated California law which bars phone companies from charging customers for unauthorized services.

“No cell phone company should profit from calls made by thieves or unauthorized users,” says Mr. Brown.

The agreement, a stipulated judgment filed Wednesday with San Francisco County Superior Court, requires the company to credit a customer’s bill or immediately investigate customer reports that the calls were made after the phone was lost or stolen.

The company may only charge a customer if an investigation determines that the customer actually authorized the charges.

The judgment requires AT&T Mobility to inform each of their customers of their legal rights regarding lost or stolen phones. Under the agreement, AT&T must either credit the disputed charges or inform customers of their legal rights.

AT&T must notify customers -- in writing -- of these new requirements and assist customers to obtain credit for amounts already paid on lost or stolen phones, back to year 2003. AT&T will also pay the Attorney General's Office $500,000 for costs of the investigation and for the Unfair Competition Law Fund, administered by the California District Attorneys Association.

“This groundbreaking settlement makes AT&T the first cell phone company that has agreed to protect its customers from cell phone rip-offs and other unauthorized uses,” says Mr. Brown. “It is now time for the rest of the cell phone industry to step forward and follow AT&T’s example.”

"We have agreed to these extra steps for the protection of our customers. While AT&T has admitted no wrong doing in this matter, we believe today’s agreement is the right thing to do," says AT&T spokesman Ted Carr in a written statement.

"Consumers should monitor their wireless activity and contact AT&T if they suspect their phone has been lost or stolen; AT&T will suspend the customer’s service immediately to avoid unauthorized charges and will reactivate the service at no charge," he says.

The Attorney General’s Office began the investigation in 2006 after several consumers complained they were being charged thousands of dollars for calls made on cell phones that were stolen. In one case, calls originated from Mexico, a country the customer had never visited. Although customers could fully document that the calls were unauthorized, AT&T refused to credit the accounts.

The law for cell phones is similar to that for credit cards: customers have a right to dispute unauthorized charges and request an investigation. Customers should not be held responsible for charges until the investigation concludes.