From ArsTechnica:

AT&T has agreed to pay $7.75 million after a Drug Enforcement Administration (DEA) investigation uncovered a cramming scam in which AT&T customers were billed $9 a month for a non-existent directory assistance service.

When the DEA investigated two Cleveland-area companies for drug-related crimes and money laundering, the agency seized the companies’ “cars, jewelry, gold, and computers.” In the process, the feds “discovered financial documents related to a scheme to defraud telephone customers,” according to a Federal Communications Commission announcement today.

“The key participants in the scheme told DEA agents that the companies were set up to bill thousands of consumers (mostly small businesses) for a monthly directory assistance service on their local AT&T landline telephone bills,” the FCC said. “The DEA referred this investigation to the FCC’s Enforcement Bureau in 2015.” The FCC investigated further and convinced AT&T to agree to today’s settlement.

AT&T received a fee from the companies, known as Discount Directory, Inc. (DDI) and Enhanced Telecommunications Service (ETS), each time they placed a charge on AT&T customers’ bills, the FCC said. The charges were issued to wireline phone customers only.

“Although DDI and ETS submitted charges for thousands of AT&T customers, they never provided any directory assistance service,” the FCC said. “Neither DDI, ETS, nor AT&T could show that any of AT&T’s customers agreed to be billed for the sham directory assistance service. Phone companies like AT&T have a responsibility to ensure third-party charges are legitimate and were approved by the consumer.” AT&T never required proof from the companies that they obtained customer approvals.

The cramming charges began in January 2012 and apparently continued until the DEA investigation, even …

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