It was not too long ago that a report was published revealing that when it comes to advertising, there was a 98 percent open rate for text messages. This has led to even more text messages being sent to a larger group of people. Personally, if I do not recognize the sender of a text message, I am going to delete it. If it was a real message the person, not the organization, will try to contact me again.

I mentioned the 98 percent open rate, which means that most people would open and read the message only to find that it was some form of advertisement. It seems that these types of text messages also come in the form of horoscopes, love tips and celebrity gossip, just to name a few.

The problem with all of this is the fact that the customers are not aware that they are being charged for these text messages even though it is not a service that they authorized. AT&T (News - Alert) billed wireless customers for these unauthorized charges. Essentially, AT&T included a fee of, in most cases, $9.99 to the monthly bill. Most people assumed that this charge was a normal part of their bill and simply paid it. Other reports indicate that sometimes the charge was for $4.99. This is a practice that is known as cramming, for obvious reasons.

Both the Federal Trade Commission (FTC) and the Federal Communications Commission (FCC (News - Alert)) investigated claims that AT&T was illegally charging its customers and fined the wireless carrier $105 million. According to the FTC, $80 million will go towards refunds to the customers that were over charged, while the remainder will go to pay state and federal fees and fines.

Apparently, AT&T was receiving a 35 percent share of the sales. That means that for each $9.99 charge on the wireless bill, AT&T was receiving $3.50. It seems that AT&T was involved in complicity with these companies. Edith Ramirez, chairwoman of the FTC, said "AT&T told these companies that it would 'help lower refunds' by only providing refunds up to two months’ worth of charges."

The FTC alleged that for companies whose billing was handled by AT&T, as many as 40 percent of subscribers complained about the charges. FCC Chairman Tom Wheeler estimated that 20 million consumers a year are crammed. He also mentioned that other wireless providers were under scrutiny. In fact, this settlement comes a few months after the FTC filed a suit against T-Mobile (News - Alert) for cramming.

The FTC complaint states that AT&T received a great deal of complaints from consumers regarding the practice. This included more than 1.3 million calls to its customer service departments about the charges back in 2011. According to the complaint, in October 2011 AT&T changed its refund policy, reducing the amount customer service representatives could offer in refunds from three months’ worth of charges to two months’ worth.

Prompted by state attorneys general, AT&T, T-Mobile US, Verizon (News - Alert) and Sprint had all agreed in November 2013 they would stop billing customers for such third-party services. AT&T said "In the past, our wireless customers could purchase services like ringtones from other companies using Premium Short Messaging Services (PSMS) and we would put those charges on their bills. While we had rigorous protections in place to guard consumers against unauthorized billing from these companies, last year we discontinued third-party billing for PSMS services."

The concern for cramming can probably best be described by the comments that Maryland Attorney General Doug Gansler made when he said, "What's shocking to me, as I thought about this particular settlement, is that we're talking about reputable companies like AT&T and others. This isn't, you know, Phil's Phone (News - Alert) Shack that's doing this."

In its official statement, AT&T also said, "Today, we reached a broad settlement to resolve claims that some of our wireless customers were billed for charges from third-parties that the customers did not authorize. This settlement gives our customers who believe they were wrongfully billed for PSMS [Premium Short Messaging Services] services the ability to get a refund."

Wheeler said "For too long, consumers have been charged on their phone bills for things they did not buy. It's estimated that 20 million consumers per year are caught in this type of [cramming] trap, [but] it stops today for AT&T."