CHARLESTON — West Virginia Attorney General Patrick Morrisey says a $105 million national settlement with AT&T over mobile cramming charges means $235,000 for the state.
Morrisey – along with attorneys general in 49 other states, the District of Columbia and federal officials – announced the settlement Wednesday. AT&T reached a settlement with them to resolve allegations that it placed unauthorized charges for third-party services on consumers’ mobile telephone bills, a practice known as mobile cramming.
AT&T will pay $105 million to the states and federal regulatory agencies. Of that, $20 million will be divided among the states, and West Virginia will get $235,000. The Federal Trade Commission will receive $80 million via the settlement for refunds for consumers who were impacted by cramming. The Federal Communications Commission will receive $5 million.
“This settlement is a victory for West Virginia consumers who had extra charges for third-party products tacked on to their cell phone bills without the their permission,” Morrisey said in a statement. “Consumers need to know that the companies they are dealing with are acting fairly and taking all necessary steps to protect them from those who may try to be deceptive.”
According to the AG's office, 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.
Morrisey and the other officials say the cramming occurred when AT&T Mobility placed charges on consumers’ mobile telephone bills for these services without the consumer’s knowledge or consent.
AT&T is the first mobile provider to enter into national settlement to resolve allegations regarding cramming; AT&T 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.
“Our office has tried to take an aggressive stance when it comes to protecting consumers against telephone scams, be they cramming or spoofing,” Morrisey said. “That is why our office joined with 38 other states and territories last month in a letter urging the Federal Communications Commission to allow phone companies to utilize call-blocking technologies that would better protect consumers from unwanted calls and scams.
Consumers can submit claims under the AT&T cramming refund program by visiting www.ftc.gov/att. On that website, consumers can find information about how to obtain a refund. 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.
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.