For Immediate Release
Media Contact: Todd Dvorak
(208) 334-4112

Date: October 8, 2014

AT&T Mobility Settles Cramming Lawsuit with States

(Boise) – Attorney General Lawrence Wasden announced today that he has joined the other 49 Attorneys General, the District of Columbia, the Federal Trade Commission and the Federal Communications Commission in reaching settlements with AT&T Mobility LLC. AT&T Mobility has agreed to pay $105 million to resolve allegations that the company placed unauthorized charges for third-party services on consumers' mobile phone bills, a practice known as "mobile cramming."

"Consumers should only pay for things they agreed to buy," Wasden said. "Too often, charges show up on their mobile phone bill for things they did not agree to purchase. I am pleased to have worked this settlement out with AT&T Mobility to address this problem."

Consumers who have been "crammed" complained 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 they have never heard of or requested.

AT&T Mobility is the first mobile telephone provider to enter into a national settlement to resolve allegations regarding cramming: AT&T Mobility was among the four major mobile carriers—in addition to Verizon, Sprint and T-Mobile—that announced it would cease billing their customers for commercial PSMS charges last fall.

Under the terms of the settlements, AT&T Mobility is required to provide $80 million to be used to pay refunds to consumers who were victims of cramming. Those funds will be administered by the Federal Trade Commission. Beginning today consumers may submit claims under the settlement at: www.ftc.gov/att. If you are unsure about your eligibility for a refund, please visit the claims website or contact the Claims Administrator at 1-877-819-9692 for more information.

The settlement requires AT&T Mobility to stay out of the commercial PSMS business. Additional terms of the settlement include:

  • AT&T Mobility must obtain consumers' express consent before billing for third-party charges, and must ensure that consumers are only charged for services if the consumer has been informed of all the terms and conditions of their payment;
  • AT&T Mobility must provide a full refund or credit to consumers who are billed for unauthorized third-party charges at any time after this settlement;
  • AT&T Mobility must inform its customers when the consumers 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; and
  • AT&T Mobility must present third-party charges in a dedicated section of consumers' mobile phone bills, must clearly distinguish them from AT&T Mobility's charges, and must include in that same section information about the consumers' ability to block third-party charges.

Idaho will also receive $230,597 from AT&T Mobility to reimburse it for attorney's fees and costs.

The Idaho Settlement is subject to approval by the Fourth Judicial District Court, Ada County.

Read the settlement agreement.

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