FOR IMMEDIATE RELEASE
NEWS ADVISORY
December 19, 2014
For More Information, contact:
Luther Strange
Joy Patterson (334) 242-7491
Alabama Attorney General
Claire Haynes (334) 242-7351
Page 1 of 2
AG STRANGE ANNOUNCES SETTLEMENT
WITH T-MOBILE FOR CONSUMER REFUNDS
(MONTGOMERY) -Attorney General Luther Strange announced that he and the
Attorneys General of all 50 states and the District of Columbia, the Federal Trade
Commission and the Federal Communications Commission, have reached a settlement
with T-Mobile USA Inc. to resolve claims against the company and to provide refunds
to consumers.
The agreement involves 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 “cramming.” Consumers who have been “crammed”
often complain about charges, typically $9.99 per month, for “premium text message
subscription services” (also known as PSMS subscriptions) such as horoscopes, trivia
and sports scores, which the consumers had never heard of nor requested.
The Attorneys General and federal regulators allege 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; Attorney General Strange announced a similar settlement with
AT&T in October of this year. 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.
“It is simply wrong for consumers to be charged for services they never asked for
and were not even aware of,” said Attorney General Strange. “I am pleased that this
agreement puts in place significant reforms and will provide refunds to eligible
consumers.”
Consumers can submit claims under the Program by visiting http://www.t-
mobilerefund.com. On that website, consumers can submit a claim, find information
about refund eligibility and how to obtain a refund, and can 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.
501 Washington Avenue * Montgomery, AL 36104 * (334) 242-7300
www.ago.alabama.gov Page 2 of 2
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 $67.5 million
to consumers – a portion of which 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.
In addition, the settlement requires T-Mobile 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. 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;
and - 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 in that same section information about the consumers’ ability to
block third-party charges.
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