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Policy + charging

T-Mobile to Pay $90M for Cramming Crimes

T-Mobile has agreed to pay up at least $90 million to settle a lawsuit the FTC filed against it for cramming, or allowing third parties to charge its customers for unwanted services -- a practice for which many of the major operators have come under fire.

T-Mobile US Inc. said on Friday it would pay back a minimum of $67.5 million to customers who claim they've been overcharged, $18 million to the 50 US states and DC and $4.5 million to the US Treasury. AT&T Inc. (NYSE: T) similarly paid out $105 million in cramming charges in October, and Sprint Corp. (NYSE: S) is in the middle of a lawsuit now.


For more on issues like this, check out the mobile content channel on Light Reading.


The Federal Communications Commission (FCC) said in its filing that T-Mobile included charges on its bills for Premium Short Message Services (PSMS) like ringtones and wallpapers that were not authorized by the customer. When questioned, refunds were not always offered or were only partially paid back, and the FCC alleges that they were not properly explained either.

The Federal Trade Commission originally filed suit against T-Mobile in July, and CEO John Legere dismissed the charges as meritless. He also said the carrier would launch a program to pay everyone back. He was, however, a bit quieter today (at least on Twitter) as the FTC and FCC will require him to do much more than that.

In addition to the payments, the FCC has also prohibited T-Mobile from charging customers for third-party PSMS; required it to develop a system to verify third-party charges, provide separate purchase confirmations for them and clearly explain them on bills; block the charges when requested; appoint a compliance offer to oversee this; and implement a training program to ensure its customer service reps can handle complaints over the charges.

— Sarah Reedy, Senior Editor, Light Reading

Ariella 12/22/2014 | 11:49:53 AM
Re: Phone bills are the worst... @Kbode I'm an AT&T customer and recently received this email:

AT&T Mobility and the Federal Trade Commission, the Federal Communications Commission, and Multi-State Attorneys General have agreed to a refund program for unauthorized charges from other companies that may have been placed on AT&T's wireless telephone bills during the period January 1, 2009, through October 8, 2014. For more information about the refund program and whether you may qualify, contact Epiq Systems (the FTC v. AT&T Claims Administrator) at 1.877.819.9692 


It also provides a site link, but comments don't allow that.
KBode 12/22/2014 | 8:25:52 AM
Re: Phone bills are the worst... Both the AT&T and T-Mobile FTC complaints note that both companies actually made bills harder  to understand so that ferreting out these charges would be more difficult.
nasimson 12/21/2014 | 6:26:44 AM
Why pay US treasury I can understand that they have to pay back the customers wrongly charged but why do they have to pay treasury? And to the states and to DC?
pzernik 12/20/2014 | 10:23:11 PM
Re: Phone bills are the worst... I'm afraid your someday will never come.  The best revenue generators are small $$ amounts in small font.  I think in the future there actually will be MORE upcharges fees for MORE premium services are we go fully into the IMS realm.  Most will go to the 3rd parties, but some will be morsels for the carriers.  Overall, customers will be getting more and more value for their money since delivering a bit of data is getting cheaper.
Ariella 12/20/2014 | 7:39:53 PM
Re: Phone bills are the worst... "because phone bills are the most difficult to decipher bills after medical bills."

LOL, yes, and by design, too. The only clear medical bill I've ever recieved was one in which the doctor simply charged per minute; the charge was $460 for 35 minutes. Fortunately, our insurance contract cut off $235.38 of that charge, and our share was much more affordable than the original bill showed. Unfortunately, regular people don't have that kind of negotiation power with such bills. 
mhhf1ve 12/19/2014 | 4:36:53 PM
Phone bills are the worst... I'm sure most consumers don't even know or realize when these unwanted charges show up on their bills -- because phone bills are the most difficult to decipher bills after medical bills. 

Hopefully someday, we'll reach a point where we don't have to account for every minute of "voice data" or text message, and we'll just pay for "data" that can transmit voice/text/video/etc... without having to pay differential rates for each kind of data. 
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