October 9, 2014
Nevada Consumers Eligible for Refunds
Las Vegas, NV - Nevada Attorney General Catherine Cortez
Masto announced that her Bureau of Consumer Protection; Attorneys General from
49 States and the District of Columbia; the Federal Trade Commission (FTC), and
the Federal Communications Commission (FCC) reached a $105 million settlement on
Wednesday with AT&T Mobility LLC (AT&T) over unauthorized, third-party text
message charges.
“Consumers have a right to know what they are being charged for on any bill,”
said Masto. “Through this settlement we will be able to refund these
unauthorized charges to consumers.”
The settlement resolves allegations that AT&T placed unauthorized charges for
third-party services on consumers’ cellphone bills, a practice known as mobile
cramming.
Under the settlement AT&T is required to provide $80 million in funds to be
used to pay refunds to consumers who were victims of cramming; the fund will be
administered by the FTC. AT&T also agreed to pay $20 million to the
Attorneys General and $5 million to the FCC. Nevada will receive $252,955
which will go towards civil penalties, attorneys' fees, and other costs of
investigation and litigation, or to be placed in, or applied to, any consumer
protection law enforcement fund, including future consumer protection or privacy
enforcement, consumer education, litigation or local consumer aid fund.
Consumers who have crammed charges may see an average of $9.99 per month fee
for premium text message subscription services, also known as “PSMS”
subscriptions. PSMS includes horoscopes, trivia, and sports scores, that the
consumers did not request.
Consumers can get more information, review their eligibility, and submit a
claim under the AT&T Mobility cramming refund program by visiting www.ftc.gov/att or contacting the Claims
Administrator at 1-877-819-9692. Refund claims must be submitted no later than
May 1, 2015.
The settlement requires AT&T 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 AT&T 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:
- AT&T 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;
- AT&T must provide a full refund or credit to consumers who are billed
for unauthorized third-party charges at any time after this settlement;
- AT&T must inform its customers when the consumers 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; and
- AT&T must present third-party charges in a dedicated section of
consumers’ mobile phone bills, must clearly distinguish them from AT&T’s
charges, and must include in that same section information about the
consumers’ ability to block third-party charges.
AT&T is the first mobile telephone provider to enter into national settlement
to resolve allegations regarding cramming. AT&T was among four major
mobile carriers, in addition to Verizon, Sprint and T-Mobile, that announced it
would cease billing their customers for commercial PSMS charges last fall.
Senior Deputy Attorney General John McGlamery, with the Bureau of Consumer
Protection, is assisting Attorney General Masto with this matter.
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