New Jersey Joins Multi-State, Federal Settlement with T-Mobile Over Phone Bill Charges for Unsolicited Text Subscription Services
TRENTON - Acting Attorney General John J. Hoffman announced today that New Jersey will receive approximately $332,000 as a result of its participation in a national settlement with T-Mobile USA, Inc. that resolves allegations the company engaged in unlawful "cramming" , “ the placing of charges for unsolicited and unauthorized third-party services on consumers' mobile telephone bills.
Customers who have been crammed often complain about charges for services - “ typically $9.99 per month for horoscopes, trivia, sports scores and other so-called premium text message subscription services“ that they have neither heard of nor requested. New Jersey and the other participating states, Â as well as federal regulators, allege that cramming occurred when T-Mobile USA placed charges on consumers' mobile telephone bills for these services ” provided not by T-Mobile but by an independent third-party â€” without consumer' knowledge or consent.
In addition to New Jersey, 48 other states, the District of Columbia, the Federal Trade Commission and the Federal Communications Commission are party to the T-Mobile settlement.
Under the settlement, T-Mobile must provide each victim of cramming who files a claim under its Premium SMS Refund Program an opportunity for a full refund. At least $67.5 million must be paid overall to consumers ” a portion of which may be paid by forgiving debts that consumers may owe T-Mobile. T-Mobile also must pay a total of $18 million to the participating states and the Federal Communications Commission.
"This is another important cramming-related settlement for New Jersey residents," said Acting Attorney General Hoffman, who announced a similar settlement with AT&T in October.
"All businesses have a legal duty to ensure that consumers get what they pay for, but their responsibility doesn't stop there," Hoffman said. "Businesses also have a duty to avoid charging customers for goods and services they haven't asked for and don't want. Our commitment is to ensure that New Jersey consumers are protected, and to hold businesses accountable when they do not fulfill their obligations under the law."
T-Mobile consumers can submit claims under the Premium SMS Refund Program by visiting www.t-mobilerefund.com. On that Web site, consumers can submit a claim, find information about refund eligibility and how to obtain a refund, and request a free account summary that details PSMS purchases on their accounts. Consumers who have questions about the Program can visit the Program Web site or call the Refund Administrator at (855) 382-6403.
The settlement requires T-Mobile to stay out of the commercial premium text message subscription business “ the platform to which law enforcement agencies attribute the lion's share of the mobile cramming problem. 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 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 cramming allegations. Acting Attorney General Hoffman announced New Jersey's participation in a $105 million national settlement with AT&T in October. T-Mobile and AT&T were among the four major mobile carriers â€“ in addition to Verizon and Sprint â€“ that announced they would stop billing customers for commercial premium text message subscriptions in the fall of 2013.
Deputy Attorney General Alina Wells, assigned to the Division of Law's Consumer Fraud Prosecution Section, handled the T-Mobile matter on behalf of the State.