T-Mobile

A man uses a cellphone as he passes a T-Mobile store in New York City. On Friday, T-Mobile agreed to pay $90 million in a multi-state settlement of allegations that it allowed unauthorized third-party text messaging subscription service charges on customers' bills, a practice known as "cramming."

(AP Photo | Mark Lennihan, 2012)

T-Mobile will pay $90 million in a multi-state settlement of allegations it placed unauthorized third-party charges for premium text messaging services on consumers' bills, a practice known as "cramming."

Under a settlement announced Friday, T-Mobile must provide full refunds to consumers who paid unauthorized third-party text messaging service charges after Jan. 1, 2010. The refunds can be in the form of a payment or as forgiveness of a debt.

The refunds must amount to no less than $67.5 million. New York Attorney General Eric Schneiderman said nearly 700,000 New Yorkers are eligible for a refund.

In addition, New York will receive $515,674 out of a total of $18 million that T-Mobile must pay individual states as part of the settlement. T-Mobile also must pay $4.5 million to the U.S. Treasury on behalf of the Federal Communications Commission.

T-Mobile also agreed to only bill for third-party charges that have been authorized by consumers, improve how third-party charges appear on consumers' mobile phone bills, better enable customers to block the placement of third-party charges on their bills, and make it easier for consumers who are crammed to get relief.

Schneiderman said a common cramming charge was a $9.99-per-month premium text messaging subscription service, also known as PSMS, for horoscopes, trivia, sports scores or other information that consumers often never requested.



"Today's settlement makes it clear that nobody is above the law, including large multinational corporations, and will provide relief to consumers across New York state," he said in a statement. "When customers are billed for services they did not request, it picks the pockets of hard-working New Yorkers."

T-Mobile is the second mobile telephone provider to settle cramming allegations. In October, AT&T agreed to pay $105 million in a similar multi-state settlement.

T-Mobile and AT&T were among the four major mobile carriers — in addition to Verizon and Sprint — that announced in the fall of 2013 they would cease billing customers for commercial premium text messaging subscription services.



How consumers can submit a claim:

Current and former T-Mobile customers can submit claims for refunds of unauthorized third-party charges that they paid by visiting http://www.t-mobilerefund.com.

Also on the website, consumers can request a free account summary that details the PSMS purchases on their accounts.

How to get more information:

Consumers with questions about the settlement can call the refund administrator at (855) 382-6403, email T-MobileRefund@gcginc.com, or write to Premium Text Message Refund Program, P.O. Box 35126, Seattle, WA 98124-5126.

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