AT&T, Sprint, T-Mobile agree to stop billing for premium SMS messages

Verizon will also discontinue the practice
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AT&T Mobility (NYSE:T), Sprint (NYSE:S) and T-Mobile US (NYSE:TMUS) entered into an agreement with 45 states to stop billing customers for premium SMS messages they receive. Verizon Wireless (NYSE:VZ) is not part of the settlement but said that it too will discontinue the practice.

The agreement was announced by the Vermont Attorney General's office, and said 45 states, led by Vermont, along with Delaware, Florida, Maryland, Oregon, Texas and Washington, have been talking with carriers about ending the practice. The office said premium SMS "accounts for the majority of third-party charges on cell phones and for the overwhelming majority of cramming complaints." Cramming is the term known for bills tied to unauthorized third-party services.

"This is a victory for cell phone users in Vermont and across the nation," Vermont Attorney General Bill Sorrell said in a statement. "While PSMS has some benefits, like charitable giving, it is also a major contributor to the current mobile cramming problem. We are pleased that AT&T, Sprint and T-Mobile have decided to stop the flow of money from the pockets of ordinary people to the bank accounts of scam artists. We're hopeful the other carriers will soon follow their lead. There is still much work to be done. My office will continue to work with other states for industry reforms and to recover money for consumers victimized by cramming."

In a statement to The Verge, Verizon said while it does we don't agree with all of Sorrell's allegations, it respects his efforts in the area.

"For years, Verizon has been vigilant in protecting our customers from bad actors," the carrier said. "There have been numerous times we have terminated programs and in some cases have taken aggressive legal action in order to ensure our customers were protected. Since premium messaging was first introduced, technology advances and smartphone adoption have dramatically changed the way customers access information. Verizon had previously decided to exit the premium messaging business because of these changes as well as recent allegations that third parties have engaged in improper conduct in providing premium messaging services to our customers."

Verizon said it is the process of winding down its premium messaging business but will continue to support text-to-donate for charitable programs and text-to-contribute for political campaigns, as did T-Mobile and Sprint. AT&T said it will continue to allow charitable programs, according to AllThingsD.

"We believe you should be treated fairly and not charged for unwanted services. Despite protections and processes put in place by T-Mobile and the industry, not all premium text message (SMS) vendors have acted responsibly," T-Mobile said on its website. "After careful evaluation of the program, T-Mobile is now in the process of protecting our customers from being billed for premium SMS services--except for charitable and political giving--as soon as possible, with as little impact as possible to our customers."

T-Mobile CEO John Legere posted on Twitter about the move. "We believe in making things right for our customers," he said.

More than two-thirds of mobile phone users received short message service spam last year, according to stats cited by researchers from the University of Minnesota and AT&T Labs in a paper they presented to the USENIX Security 2013 conference in August.

For more:
- see this Vermont Attorney General site
- see this The Verge article
- see this AllThingsD article
- see this CNET article

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