T-Mobile will pay $90M over bogus charges on customer bills

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The FCC on Friday announced a $90 million settlement with T-Mobile, making it the latest phone carrier to pay a penalty for “cramming,” which involves adding unauthorized charges to customers’ bills for subscriptions or “premium” text message services.

Under the terms of the settlement, T-Mobile will pay at least $67.5 million to fund a program for consumer refunds, plus another $18 million to state governments and $4.5 million to the U.S. Treasury.

“Yet again we are faced with a phone company that profited while its customers were fleeced by third parties who placed unauthorized charges on their phone bills,” said Travis LeBlanc, Chief of the FCC’s Enforcement Bureau.  “And once again the FCC is standing up for those customers.  Today’s settlement holds T-Mobile responsible for its billing practices and puts money directly back into the pockets of American consumers.”

The FCC’s press release says current and former T-Mobile customers can apply for refunds at www.tmobilerefund.com, though the website doesn’t appear to be working yet. Once it is up and running, it is likely to mirror a similar site where consumers who were bilked by AT&T over cramming can fill out a claim.

The T-Mobile news comes day after news that Sprint reached a similar cramming settlement with the U.S. Consumer Financial Protection Bureau.

In all the cramming cases, consumers were typically charged $9.99 from third parties such as astrologers or celebrity news sites, often without their consent. According to the FCC, the phone carriers, which earned a cut of the proceeds, effectively looked the other way and continued imposing the charges even though they should have known they were not legitimate.

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