State News

AT&T settles “cramming” case for $105 million

By Hilary Niles, VTDigger.org

About 45,000 Vermonters stand to collect roughly $1 million from a national settlement with AT&T Mobility. The $105-million 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 kickback—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 Oct. 8 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.

AT&T Mobility is the first mobile telephone provider to enter into a national settlement to resolve allegations regarding cramming, according to a press release.

Vermonters can submit claims online. If consumers are unsure whether they are eligible for a refund, they can contact the claims administrator at 1-877-819-9692.

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