INDIANAPOLIS (Oct. 8, 2014) – Ever had a charge show up on your cell phone bill that you couldn’t explain?
AT&T customers could get some of their money back, thanks to a national settlement announced Wednesday. Attorney General Greg Zoeller said Indiana is one of several states involved in the $105 million settlement, which accuses the company of charging for third-party services that were not authorized by customers. The practice is called “mobile cramming.”
Attorneys general from 49 states and the District of Columbia, the Federal Trade Commission and Federal Communications Commission were all involved in crafting the deal.
Customers complained about charges, usually $9.99 per month, for text message subscription services (also known as PSMS subscriptions) like horoscopes, trivia and sports scores that they hadn’t heard of or requested. The attorneys general said AT&T put those charges on cell phone bills without customers’ knowledge or consent.
Zoeller estimated that 460,000 Hoosiers could have been affected by “cramming.” The FTC will administer an $80 million fund to repay those victims. Hoosiers can check this website to see file a claim or see if they’re eligible. They can also call the Claims Administrator at 1-877-819-9692 for more information. In addition, AT&T will have to pay about $25 million in fines and fees.
Zoeller urged customers to file a claim immediately if they were affected. He also reminded Hoosiers to keep a close eye on their bills for unauthorized or unexpected charges.
AT&T and three other mobile carriers—Verizon, Sprint and T-Mobile—announced plans to stop billing their customers for commercial PSMS charges. As part of the settlement, AT&T will stay out of the commercial PSMS business that investigators say was responsible for much 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
- 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.
AT&T issued the following statement:
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.