New Jersey Joins Multi-State, Federal Settlement with AT&T Mobile Over Phone Bill Charges for Unsolicited Text Subscription Services
TRENTON – Acting Attorney General John J. Hoffman announced today that New Jersey will receive more than $368,000 as a result of its participation in a global settlement with AT&T Mobility that resolves allegations the company engaged in unlawful “cramming” – the placing of charges for unsolicited and unauthorized third-party services on consumers’ mobile telephone bills.
Customers who have been crammed often complain about charges for services -– typically $9.99 per month for horoscopes, trivia, sports scores and other so-called Premium Text Message Subscription Services -- that they have neither heard of nor requested. New Jersey and the other participating states, as well as federal regulators, allege that cramming occurred when AT&T Mobility placed charges on consumers’ mobile telephone bills for these services—provided not by AT&T but by an independent third-party—without consumer’ knowledge or consent.
Under the settlement, AT&T Mobility is required to provide $80 million in funds to be used to pay refunds to consumers who were victims of cramming. The fund will be administered by the Federal Trade Commission (FTC). Beginning today, consumers can submit claims under the AT&T Mobility cramming refund program by visiting
www.ftc.gov/att. On that Web site, consumers can find information about how to obtain a refund. If consumers are unsure about whether they are eligible for a refund, they can visit the claims Web site or contact the Claims Administrator at
1-877-819-9692 for more information.
The overall, $105 million AT&T settlement involves a total of 49 states and the District of Columbia, as well as the FTC and the Federal Communications Commission.
“This is an important settlement for New Jersey residents,” Acting Attorney General John J. Hoffman said.
“Not only do businesses have a legal responsibility to ensure that consumers get what they pay for, they have a duty to avoid billing customers for goods and services they don’t want and never requested,” Hoffman said. “We are committed to ensuring that consumers throughout our state are protected, and to holding accountable businesses that do not fulfill their obligations under the law.”
The settlement announced today requires AT&T to stay out of the Premium Text Message Subscription Service business—the platform to which law enforcement agencies attribute the lion’s share of the cramming problem. Additional terms require AT&T Mobility to take a number of steps designed to ensure that it only bills consumers for authorized third-party charges, including the following:
- AT&T Mobility must obtain consumers’ express consent before billing them 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 any consumers who are billed for unauthorized third-party charges any time after the settlement announced today.
- AT&T Mobility must inform its customers – at the time they sign up for service -- that their mobile phones 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.
- 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.
In addition to its payment to the federal government, AT&T Mobility also has agreed under the settlement to pay a total of $20 million to participating states and $5 million to the Federal Communications Commission as a penalty, and to pay for the costs of the investigation. New Jersey’s total share of the settlement is $368,905.93.
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—Verizon, Sprint and T-Mobile are the others —that announced last fall they would cease billing their customers for Premium Text Message Subscription Services.
Deputy Attorney General Alina Wells, assigned to the Division of Law’s Consumer Fraud Prosecution Section, handled the AT&T matter on behalf of the State.
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