Attorney General Greg Zoeller has announced Indiana has reached a $105 million agreement with AT&T Mobility LLC after the company allegedly billed customers for unauthorized charges. Zoeller says customers complained they were “crammed” for a premium text message subscription. October 8, 2014
INDIANAPOLIS, Ind. — Attorney General Greg Zoeller announced Indiana’s involvement in a $105 million national settlement reached today with AT&T Mobility LLC, resolving allegations that the company placed charges for third-party services on customers’ cell phone bills that had not been authorized by the customer – a practice known as “mobile cramming.”
Zoeller joined attorneys general from 49 states and the District of Columbia, the Federal Trade Commission (FTC) and the Federal Communications Commission (FCC) in what has become the first national settlement to address mobile cramming allegations.
AT&T customers who were “crammed” complained 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, that they had never heard of or requested. The attorneys general and federal regulators allege that cramming occurred when AT&T Mobility placed charges on consumers’ mobile telephone bills for these services without the consumer’s knowledge or consent.
Under the terms of the settlement, AT&T Mobility 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.
Zoeller said an estimated 460,000 Hoosiers could be impacted by the settlement, and will be able to apply for a refund by visiting www.ftc.gov/att beginning today. If consumers are unsure about whether they are eligible for a refund, they can visit the claims website or contact the Claims Administrator at 1-877-819-9692 for more information.
He said eligible consumers should file a claim immediately.
“My office is working with our partners to secure refunds for Indiana residents who were overcharged by AT&T for text services they did not want or agree to,” Zoeller said. “While this agreement gives AT&T customers the tools to effectively eliminate cramming for now, this is a good reminder that people should pay close attention to their bills for any questionable fees or extra charges.”
AT&T Mobility was among the 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.
The settlement requires AT&T Mobility 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 Mobility 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 Mobility 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 Mobility 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 Mobility 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 Mobility must present third-party charges in a dedicated section of consumers’ mobile phone bills, must clearly distinguish them from AT&T Mobility’s charges, and must include in that same section information about the consumers’ ability to block third-party charges.
Zoeller thanked Deputy Attorneys General Tom Irons and Eliza Bradley for their work on this case.
Source: Office of Attorney General Greg Zoeller
October 9, 2014
Statement From AT&T:
In the past, our wireless customers could purchase services like ringtones from other companies using Premium Short Messaging Services (PSMS) and we would put those charges on their bills. Other wireless carriers did the same.
While we had rigorous protections in place to guard consumers against unauthorized billing from these companies, last year we discontinued third-party billing for PSMS services.
Today, we reached a broad settlement to resolve claims that some of our wireless customers were billed for charges from third-parties that the customers did not authorize. This settlement gives our customers who believe they were wrongfully billed for PSMS services the ability to get a refund.