T-Mobile USA has agreed to pay at least $90 million for unwanted third party charges slammed on their consumers’ bills- a practice commonly referred to as cramming. The Federal Trade Commission (FTC) and the Federal Communications Commission (FCC) announced this today. Other telecom companies have been dealt with similar penalties in the past.
“It’s frustrating when unexplained charges pop up on your cell phone bill, and even worse when they’re hidden,” North Carolina Attorney General Roy Cooper said in a statement. “Consumers shouldn’t get charged for something they didn’t agree to pay.”
The FTC had, in a complaint filed against T-Mobile in July accused them of making ‘hundreds of millions of dollars’ by charging their customers for premium SMS subscriptions. Some of these ‘services’ like flirting tips, horoscope information, or celebrity gossip cost up to $9.99 a month and were added to consumers’ bills without their approval. The company continued to do so inspite of consumers complaining about the same.
“When consumers are harmed by carriers’ unscrupulous business practices, we will marshal our collective resources to seek accountability and obtain positive reforms,” Tom Wheeler, chairman of the Federal Communications Commission, said today in a statement.
The settlement, which also resolves claims by the Federal Trade Commission and the District of Columbia, will bring “meaningful relief to millions of consumers,” Wheeler said.
This is not the first instance of a telecom major being penalized for cramming. The fourth-largest U.S. wireless carrier, a Deutsche Telekom AG (DTE) unit, had earlier been accused of tacking on third-party charges not requested by customers. Similarly, AT&T Inc. had agreed to pay $105 million to resolve similar allegations. Sprint Corp might also be penalized for the same soon, said senior officials.
“Today’s settlement makes it clear that nobody is above the law, including large multinational corporations,” New York Attorney General Eric Schneiderman said in a statement. “When customers are billed for services they did not request, it picks the pockets of hard-working New Yorkers.”
As a result of this ruling, some of their customers can look forward to getting reimbursement checks from the company over the holiday season. More than 61,000 in Hawaii alone will be entitled to such refunds.