AT&T Is Fined $7.75 Million by the FCC for Billing Scam

This is why your parents teach you to argue with the phone company over the bill. The FCC has announced that the wireless service provider AT&T will pay a hefty $7.75 million fine for a billing scam that affected thousands of customers, 9to5Mac reports.

The FCC found that AT&T allowed third parties to add false charges on customers’ monthly bills and even received a cut of the ill-gotten gains. Two fraudulent Cleveland-based companies, Discount Directories Inc. and Enhanced Telecommunications Services, were found responsible for charging customers around $9 for a phony directory assistance service. To make matters worse, it is suspected that the two companies were in reality fronts set up by drug traffickers to launder their money.

The DEA, which led the investigation of the two money-laundering companies, came away with nearly $3.4 million in drugs, cars, gold, and computers according to Yahoo News.

While AT&T was not aware of the scam, it is being charged a punitive fine for allowing drug traffickers to circumvent their protections and submit unauthorized third-party charges. $6.8 million of the fine will go to reimbursing affected customers and the remaining $950,000 will go the US Treasury Department.

For its part, AT&T has said that it has instituted stricter regulations on third parties that bill customers.