T-Mobile today agreed to pay the FTC and FCC a total of $90 million to settle accusations that the company was complicit in allowing third-parties to charge customers for unwanted services.
An FTC and FCC investigation found T-Mobile guilty of breaking the law by “engaging in an unjust and unreasonable practice of billing consumers for products or services they had not authorized; and failing to provide a brief, clear, non-misleading, plain language description of the third-party charges on the telephone bills sent to consumers.” A minimum of $67.5 million of the fine will be set aside to repay customers who claim they were overcharged.
T-Mobile will also pay $18 million to all fifty U.S. states and the District of Columbia, in addition to $4.5 million to the U.S. Treasury. As part of the consent decree, T-Mobile is prohibited from charging customers for third-party PSMS products or services.
It also requires T-Mobile to create a system so customers can verify third-party service charges before they appear on bills. T-Mobile will have to block third-party charges for free; make it easier for customers to identify possible fraudulent charges; and train customer service staff to properly resolve customer complaints regarding unauthorized charges.
“Cramming is a significant problem,” said FCC Chairman Tom Wheeler. “For too long, millions of consumers have been scammed — billed for bogus charges on their phone bills for services they didn’t request. This is unacceptable. Today’s settlement is a win for consumers who have been victimized by cramming. It means compensation for T-Mobile customers who were fraudulently billed for third-party services that they did not want or authorize. And it goes one step further. Today’s action will also help protect all of T-Mobile’s customers from bogus third-party charges in the future.”
Sprint was recently sued for similar practices. AT&T settled cramming charges with the FCC for $105 million earlier this year.
