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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