T-Mobile has settled a case with Federal Trade Commission about cramming unwanted charges on customer bills. The carrier has agreed to refund those bogus charges to the customers and pay the fines, all of which amount to a total of $90 million.
According to a statement released by the FTC, T-Mobile will be paying full refunds to those customers it had billed without authorization, a $4.5 million fine to the FTC, and an additional $18 million fine and penalties to the attorneys general of all 50 states the District of Columbia.
Mobile Cramming is an illegal practice where carriers impose charges on customers without their authorization or consent. These charges are often disguised as tax or some other service fee. Carriers intend to get the customers to pay these charges without ever noticing that they are purely fraud.
“Mobile cramming is an issue that has affected millions of American consumers,” FTC Chairwoman Edith Ramirez said in an official statement. He added that consumers should be able to trust that their mobile phone bills reflect the charges they authorized and nothing more.
FTC in its statement said that T-Mobile had charged its customers for third-party services such as horoscopes, love tips, celebrity gossips and so on. The typical charge customers had to pay was $9.99 per month.
Mobile cramming has been on the rise and in recent days, the FTC has been aggressively working to take these companies to justice that have been involved in this illegal practice. Since 2013, the commission has filed at least seven cases against various companies that were involved in mobile cramming.
The fine and refund T-Mobile has agreed to pay is in settlement of one of those cases FTC filed back in July 2014. It found the company involved in illegally charging its subscribers and making a big profit out of it.
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However, T-Mobile isn’t the only culprit that is involved in charging subscribers illegally. In the name of third-party services, carriers such as AT&T, Sprint, and Verizon all have been involved in some level of mobile cramming. Back in October, AT&T agreed to pay $105 million in settlement with the government over its case of mobile cramming; and in November last year, AT&T, T-Mobile, Sprint and Verizon all agreed to stop charging customers in the name of third-party services.
In order to pursue these cases on the consumers’ behalf, the Federal Trade Commission works with other bodies such as Federal Communication Commission and Consumer Financial Protection Bureau. The latter has enforcement authority over companies that process payment over mobile phones. It has used that authority just last week against Sprint for the same cramming practices.
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For mobile subscribers in the United States, FTC has been doing a great favor by eliminating companies from being engaged in such illegal charging. And the fact that customers are actually getting refunds of those unwanted charges comes as a bonus.
