The Federal Trade Commission has filed a lawsuit against AT&T Wireless for their controversial wireless broadband practice of charging customers prior to the wireless Internet contract was complete. The lawsuit, filed by the Consumer and Business Protection Division of the Federal Trade Commission, alleges that AT&T did not disclose the fact that it would charge them an additional fee for unsecured wireless internet services when they were not using those services. The charges violates the Federal Communication Commission’s rules on deceptive advertising. According to the lawsuit, this deceptive advertising also constitutes fraud, since it is unlawful to charge consumers for services that are not yet provided to them.
AT&T Wireless responded with a news release saying, “AT&T is not a defendant in this matter.
The complaint is entirely meritless and, as the parties will see, totally without merit.” “AT&T Wireless strongly regrets the parties’ decision to proceed in this manner and is considering its options, including possible litigation,” the release continues. It is unknown at this time whether or not the company will seek to have the charges thrown out. The FCC can also be expected to take further action against AT&T Wireless.
According to the complaint, after the wireless Internet contract was completed between AT&T and its customers, they received an email from the Wireless Customer Reverse Lookup service stating that the pending wireless Internet charges had been denied due to a failure of account entry.
According to the complaint, the customer was never given the opportunity to accept or decline the charges and had to accept the charges without any explanation from the Wireless Customer Reverse Lookup system. Several months later, the FTC found merit in the lawsuit and the charges were dismissed. However, the FTC complaint notes that AT&T did not immediately inform the customer that his charges had been rejected, thereby causing him to improperly incur fees.
The lawsuit against AT&T Wireless originally arose because it was unaware that the wireless broadband contract could void if there were unpaid bills.
The complaint further alleges that the company failed to make any attempt to find out whether the charges were allowed to remain unpaid, or to get the charges resolved prior to signing the contract. This caused the customers to pay additional fees for services that they had not agreed to acquire, which became another reason the wireless plan failed to achieve its original business goals. Additionally, the original AT&T Wireless agreement contained a waiver that allowed the company to increase the charges at any time, as long as the customer was informed of the increase before purchasing the plan.
The Commission is currently examining whether all violations of the anti-trust laws, and other statutes, were engaged in by AT&T Wireless.
If the Commission finds that any of these violations occurred, the Commission will issue an order that will allow AT&T Wireless to resume selling wireless broadband to consumers. In the past, the Commission has fined and sent cease and desist orders to companies that violate the Federal Trade Commission’s rules, and this case certainly falls into that category. Therefore, the Commission is looking to protect consumers from deceptive and unethical practices of large telecommunications companies such as AT&T Wireless.
In addition to being a direct violation of the law, the charges levied on AT&T Wireless under the improper billing practices are unfair given the fact that the charges are typical of typical billing practices for wireless broadband.
When consumers go to obtain wireless internet service, they expect that the charges that they pay will be the same prices that they would pay for any traditional wired internet service, or DSL service. As previously stated, the charges in the lawsuit have been very high for wireless broadband. However, the charges that were found by the FTC in their investigation were found to be deceptive advertising claims, and were not advertised as a benefit of signing up for the AT&T Wireless broadband services. As a result of the FTC’s actions, and the complaints that were filed by customers, the company will have to pay their penalties, and will no longer be able to charge these deceptive fees to consumers.