When T-mobile customers in Florida started complaining about unauthorized charges showing up on their bills, the company said it wasn't to blame - it was simply passing on "sales" by third parties.
But after the Florida Attorney General's office intervened, T-Mobile has agreed to do more. The company has agreed to a settlement in which it will protect consumers from third-party "cramming," including charges for "free" ringtones and other cell phone content customers either did not order or did not realize would result in a monthly charge.
Florida Attorney General Bill McCollum said T-Mobile will continue its practice of issuing credits and refunds to consumers for unauthorized charges for third-party mobile content subscription purchases. As part of the agreement, the company will provide a clear and conspicuous notice to all consumers of their continuing ability to obtain refunds.
Cell phone content includes ringtones, music, wallpaper, horoscopes and other material that is often promoted by online marketers as "free," but ultimately ends up costing up to $19.99 a month. The charges appear on a subscriber's monthly wireless bill and are usually recurring. The bill charges often appear under indiscernible names such as "OpenMarket," "M-Qube" or "M-Blox."
McCollum said a large number of complaints about cramming led to an investigation which revealed that thousands of Florida consumers had received these charges on their cell phone bills for mobile content downloads that they neither knowingly authorized nor wanted.
Prior to the investigation, T-Mobile offered its customers the ability to block third-party mobile content and to implement parental controls free of charge. The investigation and subsequent settlement have been negotiated by the Attorney General's CyberFraud Section of the Economic Crimes Division.
T-Mobile has agreed to continue using the standards previously established by the Attorney General's Office for advertising on websites, prohibiting the use of the word "free" without clear disclosure of the actual price and requiring all content providers and advertisers to clearly and conspicuously disclose the true cost of cell phone content.
These compliance standards, which include website design restrictions for online advertisers, will ensure consumers see and understand the terms and conditions of the purchase. T-Mobile will continue to enforce these standards through its contracts with all content providers and advertisers nationwide.
As part of the settlement, the company will pay a total of $600,000 to reimburse the state for the costs of its investigation and to help the Attorney General's Office fund the efforts of the CyberFraud Section as it continues working toward similar reform across the industry. The agreement was negotiated with full cooperation from T-Mobile.