Consumer Alert

Alaska Joins T-Mobile Cramming Settlement

The Alaska Office of the Attorney General joined 49 states and the District of Columbia in a settlement with T-Mobile USA, Inc. resolving allegations that T-Mobile placed unauthorized charges for third-party services on consumers’ mobile telephone bills, a practice known as “mobile cramming.” T-Mobile also reached agreements with the Federal Trade Commission and Federal Communications Commission.

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 their knowledge or consent. T-Mobile has ceased billing customers for PSMS.

Under the terms of the settlements, T-Mobile must provide each victim of cramming who files a claim under its Premium SMS Refund Program an opportunity for a full refund. On the website consumers can submit claims, find information about refund eligibility, and request summaries of PSMS charges on their accounts. Consumers can also call (855) 382-6403 with questions about the Refund Program.

The settlement requires T-Mobile to stay out of the commercial PSMS business, and take a number of steps to ensure that it does not bill for unauthorized third-party charges, including the following:

  • T-Mobile must obtain consumers’ express consent before billing consumers for third-party charges, and refund consumers when they are billed for unauthorized charges.
  • When consumers sign up for service, T-Mobile is required to tell them that their mobile phone can be used to pay for third-party charges, and how those third-party charges can be blocked.

T-Mobile must present third-party charges in a dedicated section of consumers’ mobile phone bills and clearly distinguish them from T-Mobile charges.

Consumer Protection Unit
December 2014