AT&T Overcharged Customers

AT&T will pay $105 million to settle complaints from the U.S. Federal Communications Commission, the Federal Trade Commission and 51 state-level governments that it made millions of dollars through unauthorized third-party charges on customers' mobile-phone bills.

The settlement, announced Wednesday by the two agencies and 51 state attorneys general, includes $80 million for consumer refunds and $25 million in penalties, the agencies said. AT&T knew of potential problems with premium text-messaging services for years and sought in 2011 to reassure third-party billers by saying it would limit refunds to two months, FTC Chairwoman Edith Ramirez said during a press conference.

"This should have, and in fact did, ring alarm bells at AT&T," she said. "Instead of acting to stop the practice, AT&T continued to make hundreds of millions of dollars from the practice."

The $9.99-per-month third-party charges included horoscopes, ringtones and celebrity gossip, the agencies said. AT&T took up to a 35 percent cut for the third-party charges, and combined those charges with AT&T's monthly mobile subscription on some customers' bills, Ramirez said.

AT&T's bills "suggested the services were provided by AT&T and not by third parties," she said.