T-Mobile USA, Inc has reached a global settlement on mobile cramming with Vermont and 49 other states, the District of Columbia, the Federal Trade Commission, and the Federal Communications Commission. “Cramming” is the placement of unauthorized third-party charges on a telephone bill. Together with the settlement with AT&T Mobility announced in October, this resolves the issue of mobile cramming for nearly half of Vermont’s cell-phone users. The Office of Attorney General Bill Sorrell estimates that Vermont T-Mobile users could recoup more than $25,000 in refunds. In addition, Vermont will receive over $1 million for its leadership role in the multistate investigation of T-Mobile.
“I’m pleased that neither T-Mobile nor AT&T will continue to facilitate fraud by placing these charges on their customers’ phone bills, and that we’ve been able to provide opportunities for refunds to nearly half of Vermont’s cell-phone users,” said Attorney General Sorrell. “I am especially pleased that T-Mobile has taken responsibility for its actions by committing to full refunds for all harmed consumers through an uncapped refund program—something AT&T failed to do.”
T-Mobile has agreed to pay at least $90 million to settle the claims, the overwhelming majority of which will be paid to consumers who claim refunds for past cramming; $18 million to the states (of which Vermont will receive over $1M); and $4.5 million to the Federal Communications Commission.
Consumers who have been “crammed” received wireless phone bills that included charges, typically $9.99 per month, for “premium” text message subscription services (also known as “PSMS” subscriptions) such as horoscopes, trivia, and sports scores, that the consumers had never heard of or requested.
T-Mobile is the second mobile telephone provider to enter into a national settlement to resolve allegations regarding cramming, and was among the four major mobile carriers—in addition to Verizon, Sprint and AT&T—that announced they would cease billing their customers for commercial PSMS charges in the fall of 2013.
To Collect Refunds:
T-Mobile: Submit claims by June 30, 2015, at www.t-mobilerefund.com or by calling (855) 382-6483.
AT&T Mobility: Submit claims by May 1, 2015, at www.ftc.gov/att or by calling (877) 819-9692.
Consumers can access a summary of their eligible PSMS charges through both programs. Both settlements also require the carriers to stay out of the commercial PSMS business—the platform to which law enforcement agencies attribute the lion’s share of the mobile cramming problem. Additional terms require the carriers to take a number of steps designed to ensure that it only bills consumers for third-party charges that have been authorized, including the following:
- the carriers must obtain consumers’ express consent before billing consumers for third-party charges, and must ensure that consumers are only charged for services if the consumer has been informed of all material terms and conditions of their payment;
- the carriers must provide a full refund or credit to consumers who are billed for unauthorized third-party charges;
- the carriers must inform customers when they sign up for services that their mobile phone can be used to pay for third-party charges, and must inform consumers about how those third-party charges can be blocked if the consumer doesn’t want to use their phone as a payment method for third-party products; and
- the carriers must present third-party charges in a dedicated section of the consumer’s mobile phone bills, must clearly distinguish them from carrier charges, and must include in that same section information about the consumer’s ability to block third-party charges.
Vermont AG: Dec 19, 2014