OLYMPIA — Washington State Attorney General Bob Ferguson announced a $90 million nationwide agreement with T-Mobile, resolving allegations the company placed unauthorized third-party service charges on subscribers’ telephone bills.
According to Ferguson, consumer victims of this practice, called “cramming,” are socked with charges, typically $9.99 per month, for “premium” text message services (PSMS) — such as horoscopes, trivia, and sports scores — that they have never requested or even heard of.
Under the agreement, T-Mobile will pay at least $67.5 million in restitution to consumers around the country in the form of refunds or debt forgiveness.
According to T-Mobile’s records, an estimated 230,754 Washington customers may be eligible for restitution.
The agreement requires T-Mobile to stay out of the PSMS business, which law enforcement agencies believe represents the lion’s share of the cramming problem.
The company must also take steps to ensure it’s only billing customers for charges that have been authorized. These steps include:
• Obtaining customers’ express consent before billing for third-party charges, and ensuring consumers are only charged for services if they are informed of all material terms and conditions of their payment;
• Providing a full refund or credit to any customer billed for unauthorized third-party charges in the future;
• Informing new customers that they can either block third-party charges or choose to use their mobile phone to pay third-party charges;
• Presenting third-party charges in a dedicated section of consumers’ mobile phone bills, which clearly distinguishes them from T-Mobile’s charges and contains information about how to block third-party charges.
“I will not tolerate deceptive billing practices,” Ferguson said. “My office will hold any company accountable that tries to hide unauthorized charges in the fine print of a consumer’s bill.”
The Attorney General’s Consumer Protection Division worked with the attorneys general of all 49 other states and the District of Columbia as well as the Federal Communications Commission and the Federal Trade Commission to bring about this resolution.
T-Mobile is the second mobile telephone provider to enter into a nationwide settlement which Washington has helped to lead to resolve allegations regarding cramming. Attorney General Ferguson 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 stop billing customers for commercial PSMS charges in the fall of 2013.
In addition to restitution, T-Mobile will pay $18 million to go to cost recovery for the 50 states and the District of Columbia, whose attorneys general participated in the agreement. Washington’s share of that money is $726,583.07.
The FCC will receive $4.5 million.
In order to get a refund, eligible current or former T-Mobile customers should submit claims to the T-Mobile cramming refund program by visiting www.t-mobilerefund.com.
On that website, 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 program website or call the Refund Administrator at (855) 382-6403.