AT&T and Florida's state government today revealed that they had settled a lawsuit over alleged billing fraud for $2.6 million. The agreement brings an early end to a complaint which accused the carrier of misleading customers by promising free ringtones and other downloadable content but masking charges for the download itself. In addition to the fine, the company says it will more closely monitor its own marketing to ensure that any download fees or other costs are clearly marked.
Other wireless providers in Florida will also be investigated to prevent the same practice from continuing with AT&T's rivals, according to Florida Attorney General Bill McCollum. Of the total settlement amount, $2.5 million is being dedicated towards a task force investigating other cases of digital fraud, with the rest being split towards an anti-fraud education program and settlements with affected subscribers.
The end sets a precedent for the cost of downloadable content for cellular providers, many of which charge extra for downloads beyond any up-front fees. Complaints about excess costs on cellular bills have recently surfaced in the US Congress, particularly for early cancelation fees and other charges that are often but controversially labeled as necessary. Critics have accused AT&T and others of exploiting confusion over legally required fees as well as contract lock-in.