State Joins National Settlement with AT&T
Over Data Cramming Allegations
For immediate release Wednesday, October 8, 2014
Attorney General George Jepsen and state Department of Consumer Protection (DCP) Commissioner William M. Rubenstein announced today that Connecticut, along with 49 other States and the District of Columbia, has reached a settlement with AT&T Mobility, LLC to resolve allegations that the company participated in a practice known as "data cramming."
The states, along with the Federal Trade Commission (FTC) and Federal Communication Commission (FCC) alleged that AT&T placed charges on consumers' mobile telephone bills without the knowledge or consent of the consumers. The $105 million global settlement provides refunds for affected consumers and monetary payments to participating states. In addition the settlement prohibits AT&T from engaging in such activity in the future.
The states allege that AT&T was billing consumers for premium text message subscription services (PSMS) that they had not signed up for or otherwise agreed to receive. These charges, typically $9.99 per month, were added to consumers' monthly bills for services provided by a third-party, such as daily horoscope readings, trivia and sports updates. Last fall, AT&T announced that they would cease billing consumers for such unauthorized services.
The $105 million settlement includes a $20 million payment to participating states, of which Connecticut will receive $268,252.17. AT&T will also make an $80 million payment to the FTC to fund the costs of a claims-based restitution program that will be administered by the FTC. AT&T will send notices to all consumers who incurred PSMS charges from January 1, 2009 on, informing them of the process for seeking a refunds.
“I applaud mobile carriers for discontinuing a deceitful practice that has unknowingly cost consumers for too long,” said Attorney General Jepsen. “We take allegations of data cramming very seriously and are encouraged to see that consumers will get relief for unwarranted charges and see real reform take place in the manner in which consumers are billed in the future.”
“The explosion of handheld technology, while making life simpler in many ways, also opens the door to a host of challenges for consumers and regulators,” Commissioner Rubenstein said. “We applaud those who paid careful attention to their charges, and promptly brought their concerns to our attention. We encourage everyone to be just as vigilant about their transactions in today’s changing marketplace.”
Beginning today, consumers that believe they have been billed for cramming can submit claims under the AT&T cramming refund program by visiting www.ftc.gov/att. Consumers will need to certify that the information provided is correct and that the charges were unauthorized. There are no other criteria. AT&T has agreed to provide data to the settlement administrator of the PSMS charge/refunds, and the settlement administrator will match up the claims with the data provided.
The claims process is open until May 1, 2015. If consumers are unsure about whether they are eligible for a refund, they can visit the claims website or contact the Claims Administrator at 1-877-819-9692 for more information.
Another provision in the settlement requires AT&T to bill for third-party charges only if such charges have been authorized by consumers, improve the manner in which such charges appear on consumers' mobile phone bills and enable consumers to block the placement of these charges on their bills. AT&T will also make a $5 million payment to the United States Treasury on behalf of the FCC.
Data cramming can affect both land and mobile telephone lines and can be easily overlooked on consumers' monthly bills. The charges come in an array of forms, such as marketing products or services, and are often disguised in bills as a "service fee" or "monthly charge." At $9.99 a month, these charges can add up to millions of dollars if left unnoticed by the roughly 20 million consumers reportedly affected, according to the FCC. Consumers should thoroughly read their monthly bills and examine charges carefully. If there are any charges that appear to be unwarranted, consumers should contact their telephone providers to resolve the charges.
Along with the FCC, consumers may file a complaint with the FCC online at http://www.fcc.gov/complaints or by phone at 1-888-CALL-FCC. The state Department of Consumer Protection also accepts and investigates complaints about potential data cramming. Complaints can be made at www.ct.gov/dcp or at 1-800-842-2649.
Assistant Attorneys General Philip Rosario, head of the Attorney General's Consumer Protection Department, Michele Lucan and Brendan Flynn are assisting Attorney General Jepsen with this matter.
Clickhere to read the settlement.
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