About 45,000 Vermonters stand to collect roughly $1 million from a national settlement with AT&T Mobility. The $105 million nationwide deal settles allegations that the company improperly charged customers for services they had not authorized.
Known as “cramming,” the practice entails third-party companies signing up accounts for text-message services ranging from celebrity gossip to flirting tips to trivia notes, according to the Federal Trade Commission. The account holders are not aware they have been subscribed. AT&T Mobility gets a kick-back — 35 percent or more — for the charges, which typically hover around $10 per month.
The total settlement will be split among consumers ($80 million), states ($20 million) and the Federal Communications Commission ($5 million).
Vermont Attorney General Bill Sorrell traveled to Washington, D.C., Wednesday to attend the settlement announcement in person. As the lead state in the consumer protection action, Vermont will receive an additional $1.61 million for its role.
“I hope that—going forward—the mobile telecommunications industry pays as much attention to its customers’ welfare as it does to its bottom line,” Sorrell said in a press release. “I trust it knows by now that if it doesn’t, law enforcement will be at its doorstep.”
Sorrell himself has been the victim of cramming on his state-issued cell phone. It’s not clear whether any other state-issued accounts were implicated in the activity settled Wednesday.
According to state spending reports, Vermont paid AT&T Mobility $209,486.33 for 335 accounts in the fourth quarter of Fiscal Year 2014, the latest quarter for which state spending data is available.
AT&T Mobility is the first mobile telephone provider to enter into a national settlement to resolve allegations regarding cramming, according to the press release.
Settlement funds will be administered by Federal Trade Commission. Beginning today, Vermonters can submit claims online. If consumers are unsure 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.
