CHARLESTON — West Virginia Attorney General Patrick Morrisey has announced that his office, along with attorneys general in 49 other states, the District of Columbia and federal regulators, reached a settlement with T-Mobile USA Inc. to resolve allegations that the company placed unauthorized charges for third-party services on consumers’ mobile telephone bills, a practice known as mobile cramming.
T-Mobile has agreed to pay at least $90 million to the states and federal regulatory agencies. Of that, 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.
Morrisey said West Virginia anticipates receiving $211,000.
“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. “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.”
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.
Morrisey said 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, other attorneys general, and federal regulators alleged that cramming occurred when T-Mobile placed charges on consumers’ mobile telephone bills for these services without the consumers’ knowledge or consent.
T-Mobile is the second mobile telephone provider to enter into a nationwide settlement to resolve allegations of cramming. In October, Morrisey and other attorneys general announced a $105 million settlement with AT&T Mobility. T-Mobile and AT&T Mobility were among the four major mobile carriers — in addition to Verizon and Sprint — that announced plans to 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, cramming, and spoofing,” Morrisey said. “That is why our Office joined with 38 other states and territories in a letter earlier this year urging
the Federal Communications Commission to allow phone companies to utilize call-blocking technologies that would better protect consumers from unwanted calls and scams.
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. Additional terms require T-Mobile 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:
- 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 provide a full refund or credit to consumers who are billed for unauthorized third-party charges at any time after this settlement;
- T-Mobile must inform its customers when signing 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; and
- T-Mobile must present third-party charges in a dedicated section of consumers’ mobile phone bills, must clearly distinguish them from T-Mobile’s charges, and must include in that same section information about the consumers’ ability to block third-party charges.
Consumers can submit claims under the program by visiting http://www.t-mobilerefund.com
On that site, 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 website or call the refund administrator at (855) 382-6403