Phoenix (Wednesday, October 8, 2014) -- Attorney General Tom Horne today announced that he, along with Attorneys General of the other 49 States and the District of Columbia, the Federal Trade Commission (FTC), and the Federal Communications Commission, reached a $105 million settlement with AT&T Mobility LLC (“AT&T”), resolving allegations that AT&T engaged in “mobile cramming.” The State will receive $325,770, and it is estimated that roughly 482,000 accounts in Arizona may be eligible for refunds. The amounts of the refunds will vary.
AT&T allegedly placed charges for third-party services on cell phone bills without customer knowledge or consent. People who have been victims 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.
“Charging consumers for items they haven’t agreed to purchase is unlawful under the Arizona Consumer Fraud Act,” Attorney General Tom Horne stated. “Our Office will continue to take action against those who engage in these types of practices.”
The national settlement requires AT&T to provide $80 million to be used to refund consumers who were victims of cramming. The fund will be administered by the FTC. Consumers can submit claims by visiting ftc.gov/att or may call (877) 819-9692 with eligibility questions or for more information.
AT&T has agreed to stay out of the commercial PSMS business, and along with Verizon, Sprint and T-Mobile, announced it would cease billing their customers for commercial PSMS charges last fall.
The settlement also requires AT&T to take a number of steps to ensure it only bills consumers for third-party charges that have been authorized, including:
- Obtaining consent before billing for third-party charges, and ensuring that consumers are only charged for services if they have been informed of all terms and conditions of their payment;
- Providing a full refund or credit to consumers billed for unauthorized charges any time after this settlement; and
- Showing third-party charges in a dedicated section of mobile phone bills, clearly distinguish them from AT&T’s charges, and include information about the ability to block third-party charges.
The total includes an $80 million restitution program, AT&T $20 million to the Attorneys General and $5 million to the Federal Communications Commission. This case was handled by Assistant Attorney General Dena R. Benjamin. A copy of the Assurance, which is subject to court approval, is attached.
If you believe you have been a victim of mobile cramming or any other type of consumer fraud, you may file a consumer complaint with the Attorney General’s Office at www.azag.gov/complaints/consumer. If you have questions or would like to request a complaint form, please contact the Consumer Information & Complaints Unit at (602) 542-5763 (Phoenix), (520) 628-6504 (Tucson), or toll free outside metro Phoenix, (800) 352-8431.