Another significant victory in the wireless industry occurred Monday. In an AP article it was announced that AT&T Mobility settled a class action lawsuit filed against them and several third-party content providers responsible for tacking on mysterious charges to the consumer’s bills without their consent, a practice commonly known as “cramming”.

According to the FCC’s site, cramming is defined as “the practice of placing unauthorized, misleading, or deceptive charges on your telephone bill. Crammers rely on confusing telephone bills in an attempt to trick consumers into paying for services they did not authorize or receive, or that cost more than the consumer was led to believe.” One example of cramming is the TV commercials that appear late at night on most cable channels (sometimes during the day on channels like VH1 or MTV) advertising free ringtones, horoscopes, or jokes by simply texting a code to a 5-digit number. However, during the commercial a large amount of fine print appears at the bottom half of the screen telling the viewer there is a monthly subscription involved. These ads are mainly targeted at teenagers because they are the most interested in the product, yet least likely to notice the fine print.

The monthly subscriptions are typically $9.99 or higher per month, and the services being offered in exchange can vary: free ringtone of the month clubs, daily text-message horoscopes, jokes of the day, and dating services are all examples. The third-party content provider sends the charges to the wireless carrier (in this case, AT&T) and the carrier can only assume the charges are valid and will then bill the customer. When paid, the carrier will keep a small portion of the charges as a fee. These charges are also well-placed on the bill in a way that makes them easy to overlook.

Here are some ways you can tell you are being “crammed”:

1. You begin receiving text messages on a regular basis from a 5-digit number you don’t recognize.
2. You notice an odd charge on your bill, most likely from mBlox, mQube, Jamster, among others.

The suit claims that these charges are rarely approved by the customer and since they did not agree to them, they should not have to pay them. As part of the settlement AT&T will now send the customer a text message when the subscription is “ordered”, asking them to reply. Without a reply, the customer will not be charged the monthly fee. The settlement also requires content providers to send monthly alerts reminding them how to unsubscribe from their services. This is a huge victory in the battle against cramming, as it sets a standard for the other cell phone providers to follow.
According to AT&T spokesman Marty Richter, the number of customers requesting refunds as a result of the class action will be small, “given that the company already let customers contest spurious charges” prior to the suit by either calling customer service to remove the charges or by visiting a website printed on the bill right above the third-party charges.

If you are an AT&T customer and have received subscriptions from these third-party providers between January 2004 and May 2008, you may go to the suit’s website by March 9, 2009 to make a claim. Simply fill out the form and send it in the mail. Also, if the charges have been recent, it may be worth calling your customer service department to see if they will refund those charges.

Similar suits have also been filed against Verizon, Sprint and T-Mobile.

via AP