Nevada Attorney General Announces National Settlement with T-Mobile


December 19, 2014

Las Vegas, NV – Nevada Attorney General Catherine Cortez Masto announced today that Nevada, along with 49 other states and the District of Columbia, the Federal Trade Commission and the Federal Communications Commission reached a settlement with T-Mobile USA, Inc. The settlements include at least $90 million in payments to consumers, and resolves allegations that T-Mobile placed charges for third-party services on consumers’ mobile telephone bills that were not authorized by the consumer, a practice known as “mobile cramming.”

“Mobile cramming is unauthorized and illegal,” said Masto. “This settlement is designed to refund those affected by mobile cramming and prevent future unauthorized charges to consumers.”

Nevada will receive $227,660, which will go to the AG’s Bureau of Consumer Protection, for its participation in the settlement.

Consumers who have been “crammed” often complain about charges, typically $9.99 per month for “premium” text message subscription services or “PMS” subscriptions such as horoscopes, trivia and sports scores that the consumers have never heard of nor requested. The Attorneys General and federal regulators alleged that cramming occurred when T-Mobile placed charges from third-parties on consumers’ mobile telephone bills without the consumer’s knowledge or consent.

T-Mobile is the second mobile telephone provider to enter into a nation-wide settlement to resolve allegations regarding cramming, the first being AT&T in October of this year with a similar $105 million settlement. T-Mobile and AT&T were among the four major mobile carriers—in addition to Verizon and Sprint—that announced they would cease billing customers for commercial PSMS in the fall of 2013.

Refunds

Under the terms of the settlements, T-Mobile must provide each victim of cramming who files a claim under its Premium SMS Refund Program an opportunity for a full refund. The settlement terms require that T-Mobile pay at least $90 million, $67.5 million of which must be paid to consumers nationwide. A portion of this settlement may be paid by forgiving debts consumers may owe T-Mobile. T-Mobile will also pay $18 million to the Attorneys General and $4.5 million to the Federal Communications Commission. 

Submit a Claim

Consumers may submit claims by visiting http://www.t-mobilerefund.com/.  On the website, consumers can submit a claim, find information about refund eligibility and how to obtain a refund, and request a free account summary that details PSMS purchases on their accounts.   Consumers who have questions about the program can visit the program website or call the Refund Administrator at (855) 382-6403.  

Settlement Terms

The settlement requires T-Mobile to cease commercial PSMS charges—the platform to which law enforcement agencies attribute the lion’s share of the mobile cramming problem. T-Mobile must also take a number of steps designed to ensure that it only bills consumers for third-party charges that have been authorized, including the following:

  • T-Mobile 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.
  • T-Mobile must give consumers an opportunity to obtain a full refund or credit when they are billed for unauthorized third-party charges.
  • T-Mobile must inform its customers when they sign up for services that their mobile phone can be used to pay for third-party charges, and must inform consumers of 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.
  • T-Mobile must present third-party charges in a dedicated section of consumers’ mobile phone bills, must clearly distinguish them from T-Mobile charges and must include information about the consumers’ ability to block third-party charges in that same section.

Senior Deputy Attorney General John McGlamery, with the Bureau of Consumer Protection, represented Nevada with this matter.

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