CONCORD, NH – Attorney General Joseph A. Foster announced Dec. 19 that his Consumer Protection Division — along with the Attorneys General of the other 49 States and the District of Columbia, the Federal Trade Commission, and the Federal Communications Commission— reached settlements with T-Mobile USA, Inc. that include at least $90 million in payments, and that resolve 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.”
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, that the consumers have never heard of or requested.
T-Mobile is the second mobile telephone provider to enter into a nation-wide settlement to resolve allegations regarding cramming; Attorney General Foster announced a similar, $105 million 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.
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; of this sum, at least $67.5 million must be paid 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. New Hampshire’s share of the settlement is
$202,606.85. In addition, T-Mobile estimates that approximately 14,000 New Hampshire consumers may be eligible for direct restitution payments under the redress provisions of the settlement.
Consumers can submit claims under the program by visiting www.tmobilerefund.com and 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.
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.
Any New Hampshire consumer with questions about this settlement, or other consumer
protection matters, can call the Attorney General’s Consumer Hotline at 1-888-468-4454 or file a
complaint by visiting the Attorney General’s website.