AT&T has agreed to pay $700,000 in fines to settle an Federal Communications Commission (FCC) complaint that the carrier is overcharging many of its customers.
The complaint revolves around the carrier's 2009 switch from offering a la carte smartphone data option to only offering monthly data plans to new subscribers.
Under AT&T's grandfathering policy, customers who already had a pay-as-you-go plan were supposed to have the option to keep the same rate so long as they also kept using the same smartphone from before the 2009 shift.
However, an FCC investigation found that AT&T had started switching customers over to monthly data plans without their knowledge when replacing their legacy smartphone with the same model under warranty or through insurance.
As a result, customers were charged as much as $25 or $30 per month regardless of their data usage when they should have still been eligible for per data rates.
Overcharging doesn't pay
"Today's action sends a clear signal that wireless carriers can't wrongfully charge consumers," FCC Chairman Julius Genachowski said in a statement.
"These strong FCC accountability measures will ensure customers are not over-charged. I am pleased that AT&T is taking the appropriate steps to resolve this issue."
AT&T agreed with the complaint, and is required to make a "voluntary contribution" of $700,000 to the U.S. Department of Treasury within the next 30 days.
The carrier will also implement a FCC compliance plan, which includes refunding and re-grandfathering affected subscribers, starting a new customer care training program, making additions to AT&T's customer notification policies and filing periodic progress reports to the FCC.
"Based on a review of our refund process, we believe a vast majority of those customers affected by the billing error have already been made whole," an AT&T spokesperson told CNET.
"But as part of the decree we'll be providing a bill-page notice to affected customers, offering refunds, and giving them the option to return to a data pay-per-use plan, or to have a data block applied to their phone."
The spokesperson added that less than 0.03 percent of its customers were wrongfully charged through the policy.
Even if it is for just a small number of subscribers, with wireless data rates ballooning through shared data plans it's crucial to check that no unwelcome charges are popping up on monthly bills.