Missouri is among the states and organizations that have reached a settlement with T-Mobile regarding allegations that the company placed charges for third-party services on customers’ bills without authorization from those customers.
The company will now be required to pay $90 million in penalties and restitution for the practice known as “cramming”. This includes more than $283,000 to the state of Missouri.
Missouri residents are also entitled to seek refunds on cramming violations. Starting immediately, consumers can submit claims by visiting T- Mobile’s refund program site.
Attorney General Chris Koster announced today that Missouri, along with 49 other states and the District of Columbia, the Federal Trade Commission, and the Federal Communications Commission, has reached a settlement with T-Mobile USA, Inc., to resolve allegations that the company placed charges for third-party services on consumers’ mobile telephone bills without authorization by the consumers, a practice known as “cramming.” The settlement requires the company to pay $90 million in penalties and restitution. Missouri consumers will be entitled to seek refunds for cramming violations, and Missouri will receive $283,244 in penalties.
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) that send texts with information such as horoscopes, trivia, and sports scores. Often consumers found themselves receiving these services without having requested them.
Last fall, T-Mobile, along with AT&T Mobility, Verizon and Sprint, announced that it would stop billing their customers for these third-party charges through PSMS. Under the terms of today’s settlement, T-Mobile is required to pay at least $67.5 million in refunds to consumers who were victims of cramming.
Beginning today, consumers can submit claims under the T-Mobile cramming refund program by visiting http://www.t-mobilerefund.com. On that website, consumers can submit a claim, find information about refund eligibility, and request a free account summary that details “premium” text message subscription services purchases on their accounts. If consumers are unsure about whether they are eligible for a refund, they can visit the program website or contact the Refund Administrator at 855-382-6403 for more information.
In addition to the $67.5 million in consumer restitution, T-Mobile has agreed to pay $18 million in penalties to the states, including Missouri’s share of $283,244, and an additional $4.5 million to the Federal Communications Commission.
The settlement also requires T-Mobile to stay out of the commercial PSMS business. To ensure that no unauthorized charges are billed to consumers, T-Mobile must take a number of preventive actions, 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 an opportunity for consumers to claim a full refund or credit when consumers are billed for unauthorized third-party charges at any time after this settlement;
- T-Mobile 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
- 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.
“Cramming is an insidious practice that has cheated thousands of Missourians out of their hard-earned money,” Koster said. “With this settlement with T-Mobile, we are one step closer to ending this practice once and for all.”
In addition to joining the multistate case against the carriers, Koster sued six telephone cramming companies in March of 2012 to stop them from putting unauthorized charges on consumers’ bills. Those companies were Green Certification, LLC, FamilyContact 911.com, The Small Business Organization, LLC, V&T Communication Services, LLC (also known as Odyssey Communications), ID Lifeguards, Inc., Coast to Coast Voice, LLC. Koster has reached settlements with five of the companies and obtained refunds from those companies for consumers. One of the companies declared bankruptcy. In October, AT&T entered a settlement to resolve the cramming allegations from past practices that included $80 million in restitution for consumers and more than $300,000 in penalties for the state of Missouri.