T-Mobile will pay $90 million to settle "cramming" charges

U.S. carrier T-Mobile has settled charges levied by the FTC and FCC that they charged customers for unwanted services, a settlement that comes to the tune of at least $90 million. The practice, known as "cramming", stemmed from third-party services from "premium SMS" providers for wallpapers, ringtones, horoscopes, celebrity gossip, and more.

Said FCC Chairman Tom Wheeler:

"Cramming is a significant problem. 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."

The $90 million penalty will be paid as restitution by T-Mobile. The charge for such services ranged up to $14/month, and was billed as non-descriptive strings of numbers and letters, obscuring what it was that the user was actually paying for. As you can imagine, the unknowing customer could see their bill seriously jacked up as a result.

T-Mobile stopped the practice back in 2013 and has agreed to honor all claims for refunds from customers. Of that $90 million, $18 million will go to the 50 US states (plus DC) participating in the settlement, and $4.5 million to the US Treasury. The rest is dedicated to resolving customer claims, though T-Mobile will pay more than that if necessary to refund all customers.

Source: FCC (1, 2)

Derek Kessler

Derek Kessler is Special Projects Manager for Mobile Nations. He's been writing about tech since 2009, has far more phones than is considered humane, still carries a torch for Palm, and got a Tesla because it was the biggest gadget he could find. You can follow him on Twitter at @derekakessler.

  • Those white hats looking more gray today...
  • Huh?? Not precious T-Mobile!! No way.... Sent from the iMore App
  • Time for one of Jonny's legendary explicative laden rants. Love that guy!
  • And the U.S. treasury gets 4.5 million why?
  • All Carriers did this, AT&T was fined more than T-Mobile a year before. It's not right and I believe this didn't happen under the watch of John Legere. T-Mobile is a different company that I'm very happy to say gives me great service for a very fair price. Posted via the iMore App for Android