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December 19, 2014

T-Mobile to Provide Iowans Refunds under $90 Million Nationwide Cramming Settlement

More than 12,000 Iowa T-Mobile customers eligible for refunds under settlement over unauthorized charges

(DES MOINES, Iowa) T-Mobile USA Inc., the nation’s fourth largest wireless carrier, will provide refunds to Iowa consumers under a $90 million nationwide joint state-federal settlement over allegations that the company placed unauthorized third-party charges on consumers’ wireless phone bills, a practice known as “cramming.”

Under an agreement with Attorney General Tom Miller and attorneys general in all 50 states, the Federal Trade Commission and the Federal Communications Commission, T-Mobile must provide $67.5 million in refunds or debt forgiveness to consumers who file cramming-related claims.  The company estimates that more than 12,000 Iowans will qualify for refunds under the settlement.

T-Mobile will also pay $18 million to state attorneys general, including more than $232,000 to Iowa, and $4.5 million to the Federal Communications Commission.

“This settlement reimburses thousands of Iowans forced to pay for something they didn’t want and didn’t use, stops scammers from doing this again, and puts in place new protections for consumers,” Miller said.

Consumers who have been “crammed” often complain about charges they didn’t authorize, typically $9.99 per month, for so-called “premium” text message subscription services (also known as “PSMS” subscriptions) such as horoscopes, trivia, and sports scores.  The charges continued, often for months, unless and until consumers noticed and stopped them.

For Information and to File Claims
Under the T-Mobile settlement, the company must provide consumers who file a Premium SMS Refund Program claim an opportunity for a full refund.  Consumers can submit claims at www.t-mobilerefund.com.

In addition to submitting claims, consumers can obtain additional information about refunds, and can request a free account summary that details PSMS purchases on their accounts.   Consumers can also call the refund administrator, toll-free, at (855) 382-6403.
  
Additional Settlement Terms
The settlement requires T-Mobile to stay out of the commercial PSMS business.  T-Mobile must also 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 the consumer has 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 the consumer doesn’t want to use their phone as a payment method for third-party products.
  • 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.

T-Mobile is the second mobile telephone provider to enter into a nationwide settlement to resolve allegations regarding cramming.  In October, Miller announced a similar, $105 million settlement with AT&T.  In November of 2013, T-Mobile, AT&T, Verizon and Sprint announced they would cease billing customers for commercial PSMS.

T-Mobile served 52.9 million subscribers in the third quarter of 2014, according to the publication FierceWireless, attributing research firm Strategy Analytics.

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