December 22, 2014
ATLANTA, GA – John Sours, Administrator of the Governor’s Office of Consumer Protection, announced today that his agency-along with the Attorneys General of the other 49 States
and the District of Columbia, the Federal Trade Commission, and the Federal Communications Commission-reached settlements with T-Mobile USA, Inc. that include at least $90 million in payments, and that resolve allegations that T-Mobile placed charges for
third-party services on consumers’ mobile telephone bills that were not authorized by the consumer, a practice known as “mobile cramming.” 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 the consumer’s knowledge or consent. T-Mobile is the second mobile telephone provider to enter into a nation-wide settlement to resolve allegations regarding cramming; Administrator John Sours announced a similar, $105 million settlement with AT&T in October of this year. T-Mobile and AT&T
were among the four major mobile carriers-in addition to Verizon and Sprint-that announced they would cease billing customers for commercial PSMS in the fall of 2013.

“This case highlights the importance of carefully reviewing your phone bill each month for unauthorized charges,” says John Sours, Administrator of the Governor’s Office of Consumer Protection. “Cramming is a deceptive practice and we trust that the safeguards put in place under this agreement will protect T-Mobile customers going forward.”

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. 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-a portion of which may be paid by forgiving debts consumers may owe T-Mobile. T-Mobile will also pay $18 million to the Attorneys General and $4.5 million to the Federal Communications Commission.

Consumers can submit claims under the Program by visiting http://www.tmobilerefund. com. On that website, consumers can submit a claim, find information about refund eligibility and how to obtain a refund, and can request a free account summary that details PSMS purchases on their accounts. Consumers who have
questions about the Program can visit the Program website or call the Refund Administrator at (855) 382-6403.

The settlement requires T-Mobile to stay out of the commercial PSMS business-the platform to which law enforcement agencies attribute the lion’s share of the mobile cramming problem. T-Mobile must also 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 bi!led 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; and

• 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.

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Shawn Conroy

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