(COLUMBUS, Ohio)—Attorney General Mike DeWine announced today that Ohio has joined the other 49 states, the District of Columbia, the Federal Trade Commission, and the Federal Communications Commission in a settlement with T-Mobile USA Inc. that includes at least $90 million in payments and resolves allegations that T-Mobile placed unauthorized third-party charges on consumers’ cell phone bills.
Nearly 200,000 Ohioans may be affected by the settlement.
“Many consumers may not realize that they have had unauthorized charges on their cell phone bills,” Attorney General DeWine said. “The charges are often small but they can add up over time. We encourage all Ohioans to carefully check their phone bills, and we are pleased that under this settlement T-Mobile customers will be able to recoup their money.”
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.
The attorneys general and federal regulators allege that cramming occurred when T-Mobile placed charges from third parties on consumers’ mobile telephone bills without the consumers’ knowledge or consent.
T-Mobile is the second mobile telephone provider to enter into a nationwide settlement to resolve allegations regarding cramming. Attorney General DeWine 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 settlement, T-Mobile must provide each cramming victim who files a claim under its Premium SMS Refund Program an opportunity for a full refund. Of the minimum $90 million sum that T-Mobile must pay, at least $67.5 million must be paid to consumers (though more could be paid to consumers if enough valid claims are submitted).
Consumers can submit claims under the program by visiting http://www.t-mobilerefund.com. On that website, consumers can find eligibility information and 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.
In addition to consumer restitution, T-Mobile will pay $18 million to the states and $4.5 million to the Federal Communications Commission. Ohio will receive $377,648.41 for its participation in the settlement.
The settlement requires T-Mobile to stay out of the commercial PSMS business, the platform that accounts for most of the mobile cramming problem, according to law enforcement.
T-Mobile also must 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 they have 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 they don’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.
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Documents
Settlement (PDF)
Media Contacts
Dan Tierney: 614-466-3840
Kate Hanson: 614-466-3840