AT&T: Cities Are Hoarding Wireless Customers’ Money

AT&T says it’s working hard to refund customers for an illegal tax collection, but is running into trouble doing so.

It all stems from a settlement the communications giant agreed to with the state of Washington. Due to a billing error, between 2005 and 2010, the carrier collected municipal taxes on Internet data services, which is not authorized; those taxes only apply to phone service, KIRO-TV reported.

The problem is that AT&T must now get the money back from the cities to pay customers back. It wants $5 million from the City of Seattle alone, which says it’s reviewing the request.

New Cingular Wireless, an AT&T Mobility affiliate, sued a number of cities last year to get the refund money. The city of Kent, Wash., which supposedly owes $500,000, has refused to pay, claiming it didn’t get enough details about exactly who was overcharged. The municipality also had concerns that some of the money demanded covered people who don’t live within the city’s boundaries. Another lawsuit has since been filed.

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