Attorney General Buddy Caldwell's office announced Thursday that AT&T Mobility has agreed to a $105 million settlement with Louisiana and the other 49 states over allegations that the company added third-party charges to AT&T customers' bills without their consent or knowledge.
Attorney General Buddy Caldwell's office announced Thursday that AT&T Mobility has agreed to a $105 million settlement with Louisiana and the other 49 states over allegations that the company added third-party charges to AT&T customers' bills without their consent or knowledge - a practice known in trade-speak as "cramming."
According to Caldwell's office, consumers who have been crammed "often report 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." Three other telecoms - Verizon, Sprint and T-Mobile - are also accused of cramming and each has announced it will stop billing customers for PSMS subscriptions and is in settlement talks with the Federal Trade Commission.
The agreement between the FTC and AT&T Mobility also requires the company to get out of the PSMS business. The company, according to Caldwell's office, has also agreed to the following:
? AT&T Mobility 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;
? 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.
"This is a victory for consumers, businesses and cell phone users across Louisiana," Caldwell says in a release announcing the settlement. "Today's agreement addresses the despicable practice of mobile cramming and helps to ensure that consumer protections are in place. I encourage Louisiana consumers who have been affected by mobile cramming through AT&T Mobility to submit a claim through the FTC's restitution program."
The FTC is charged with distributing as refunds $80 million of the settlement to consumers who were crammed by AT&T Mobility. ($20 million goes to the state attorneys general and the remaining $5 million goes into FTC coffers.) Consumers can learn more about seeking a refund by going to the agency's website or by calling (877) 819-9692.