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AT&T settles cell phone fee suit

Wireless subscribers who were charged for ringtones and other content like horoscopes will soon be able to get a refund.

AT&T wireless subscribers who were hoodwinked into signing up for recurring charges for ringtones and other content will receive refunds as part of a class action settlement.

Customers will get refunds for charges that appeared on their bills between January 1, 2004, and May 30, 2008, the Associated Press reported Monday.

This is the first nationwide settlement that refunds customers' money from charges for third-party content, the news service reported. Jay Edelson, who filed the claim on behalf of the plaintiffs, has filed similar lawsuits against Verizon Wireless, Sprint Nextel, and T-Mobile USA.

This latest decision could boost his case in the other disputes.

Third-party vendors have slyly been marketing ringtones and other text-based content like horoscopes and jokes directly to wireless subscribers either by asking customers to enter their phone numbers on Web sites or through "spam" text messages. Often the charges for this content are hidden or poorly explained. Many customers don't realize what they've signed up for until they get their cell phone bill with the new charges. Many times, these charges are recurring and customers have found it difficult to cancel them.

Mobile operators keep a portion of the fee for themselves, and the third-party content provider gets the rest. In the class action suits against AT&T, the plaintiffs argued that AT&T should have been more careful in vetting these services, the AP reported. AT&T agreed to the settlement, but admitted no wrongdoing.

Since the lawsuits were filed, AT&T has changed its policy on third-party content. It now requires customers who sign up for content with recurring fees to confirm via text message that they actually want to sign up for the service. AT&T is also requiring content providers to send monthly reminders to consumers with instructions for how to unsubscribe to their services.

Exactly how much the settlement will cost AT&T is unclear, the AP reported. The company has already allowed some customers to contest their charges. So the actual number of individuals able to get refunds may be small.

AT&T will soon send out notifications to its 70 million wireless subscribers. Under the terms of the settlement, claims must be filed within 90 days of the final approval of the settlement, which is set for December.