Oct. 9, 2014. Consumers across the country including in North Carolina will get $80 million back from AT&T Mobility for unauthorized charges on their cell phone bills, Attorney General Roy Cooper said today.
Cooper, the attorneys general for 49 other states and the District of Columbia, the Federal Trade Commission (FTC) and the Federal Communications Commission (FCC), have reached a settlement with AT&T Mobility over allegations of mobile cramming, the practice of placing unauthorized charges for third-party services on consumers’ cell phone bills.
Approximately 713,000 North Carolina consumers could be eligible for refunds under today’s settlement.
“These hidden charges confuse and frustrate consumers,” Cooper said. “Phone bills should be clear and easy to read so you can get accurate information about what you owe and what you’re paying for.”
Complaints about cramming on mobile phone bills typically involve a $9.99 per month fee for premium text message subscription services (also known as “PSMS” subscriptions) such as horoscopes, trivia, and sports scores, that consumers have never heard of or requested. Many consumers got duped into signing up for these unwanted services via websites, for example when they provided their phone number to receive survey results or enter a contest. In many cases, consumers were not told they were signing up for subscription services.
AT&T Mobility is the first mobile telephone provider to enter into national settlement to resolve allegations regarding cramming. Investigations and negotiations involving Verizon, Sprint and T-Mobile are ongoing. All four major mobile carriers announced last fall that they would cease billing their customers for commercial PSMS charges.
Under the terms of today’s settlement, AT&T Mobility is required to pay $80 million to be used to pay refunds to consumers who were victims of cramming. Beginning today, consumers can submit claims under the AT&T Mobility cramming refund program by visiting www.ftc.gov/att. AT&T customers eligible for refunds should be notified by the company. 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.
In addition, AT&T Mobility agreed to pay $20 million to the Attorneys General and $5 million to the Federal Communications Commission. North Carolina will receive $386,912.27 for its participation in the settlement.
The settlement also requires AT&T Mobility to stay out of the commercial PSMS business which is thought to be at the center of the cramming issue. Additional terms require AT&T Mobility to take a number of steps to ensure that it only bills consumers for third-party charges they have agreed to pay. AT&T Mobility must:
- Get consumers’ express consent before billing them for third-party charges, and make sure that consumers are only charged for services if they’ve been informed of terms and conditions;
- Provide a full refund or credit to consumers who are billed for unauthorized third-party charges at any time after this settlement;
- Inform its customers when they sign up for services that their mobile phone can be used to pay for third-party charges, and how those charges can be blocked if the consumer doesn’t want to use their phone as a payment method; and
- List third-party charges in a dedicated section of consumers’ mobile phone bills, clearly distinguished from AT&T Mobility’s charges, and include in that same section information about how to block the charges.
“Review your cell phone bill carefully to catch any mistakes or unauthorized charges,” cautioned Cooper. “If you spot charges you didn’t agree to, let your mobile phone carrier know right away, and file a complaint with our office if you need help resolving the problem.”