T-Mobile To Pay At Least $90M To Settle ‘Cramming’ Charges

By Fionna Agomuoh on December 19 2014 2:07 PM

T-Mobile has agreed to pay at least $90 million in penalties and refunds to settle unauthorized billing charges, New York Attorney General Eric Schneiderman announced Friday. The Federal Trade Commission and the Federal Communications Commission originally sued the mobile carrier in July, charging that it had subjected subscribers to a practice called "mobile cramming."

Cramming involves carriers allowing third parties to deliver content, such as horoscopes and celebrity gossip, to mobile devices -- often without fully disclosing the charges. In T-Mobile’s case, customers were charged as much as $9.99 per month for receiving these extras through a “premium text message service.”

The FTC said it found that T-Mobile profited from taking up to 40 percent of these unwanted charges, totaling in the tens of millions of dollars. T-Mobile initially spoke out against the FTC’s claims, with CEO John Legere calling the accusations “misdirected.” Legere insisted that T-Mobile made efforts to fully refund customers hit by cramming, but the FTC said the carrier has not been as compliant as it claims.

The commission said in July that its primary charge against T-Mobile was that the carrier did not refund customers in full. Many customers reportedly received only partial refunds for two months of charges, while others were told by T-Mobile to seek refunds directly from the third-party content providers but were not given accurate contact information.

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