Attorney General Tom Horne Announces $90 Million Settlement With T-Mobile

Phoenix (Friday, December 19, 2014) -- Attorney General Tom Horne announced today that he, along with the Attorneys General of 49 other States and the District of Columbia, the Federal Trade Commission, and the Federal Communications Commission, reached a $90 million settlement with T-Mobile USA, Inc., resolving allegations that the company placed unauthorized charges for third-party services on its customer’s phone bills, a practice known as “mobile cramming.”

Arizona will receive $293,193 from the settlement, and it is estimated that 243,000 customers across the state may be eligible for refunds. The amount will vary depending on the unauthorized charges.

Consumers who have been “crammed” often complain about charges, typically $9.99 per month, for “premium” text message subscription services such as horoscopes, trivia, and sports scores that they have never heard of or requested. It was alleged that cramming occurred when T-Mobile placed charges from third-parties on consumers’ phone bills without their knowledge or consent. 

“Charging people for services they didn’t request or know about is illegal under the Arizona Consumer Fraud Act,” Attorney General Tom Horne stated. “I strongly encourage T-Mobile customers who were victims of wireless cramming to file a restitution claim with the company or our office.”

Under the terms of the national settlement, T-Mobile must provide each victim who files a claim an opportunity for a full refund. The settlement terms require that T-Mobile pay at least $90 million; of this sum, at least $67.5 million must be paid to consumers. T-Mobile will also pay $18 million to the Attorneys General and $4.5 million to the Federal Communications Commission. 

Consumers who paid for unauthorized charges billed from June 1, 2010 through the effective date of the Federal Trade Commission’s Order can file claims through the restitution program or obtain further information by visiting or calling T-Mobile’s Refund Administrator at (855) 382-6403.  

The settlement also requires T-Mobile to stay out of the commercial PSMS business and must take a number of steps to ensure it only bills customers for charges that have been authorized, including:

  • Obtaining consent before billing for third-party charges, and ensure customers are only charged for services if they have been informed of all terms and conditions; 
  • Giving customers the opportunity to receive a full refund/credit when they are billed for unauthorized charges;
  • Informing customers that their mobile phone can be used to pay for third-party charges, and how those charges can be blocked if they do not want to use their phone as a payment method for products; and
  • Listing third-party charges in a dedicated section of the phone bill that clearly distinguishes from T-Mobile charges, along with information about how to block third-party charges.

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. 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.

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