T-Mobile to Refund Customers Millions for Billing for Unwanted Services

Advertisement
By Associated Press | Updated: 20 December 2014 11:47 IST

T-Mobile US will pay at least $90 million, mostly in refunds, for billing customers for cellphone text services they didn't order, under a settlement with federal regulators.

The Federal Trade Commission announced the agreement Friday with T-Mobile over billing for unauthorized charges, a practice known as "cramming." T-Mobile, the fourth-largest U.S. cellphone company, is paying at least $67.5 million in refunds to affected customers plus $18 million in fines to the 50 states and the District of Columbia, and $4.5 million in fines to the Federal Communications Commission.

Advertisement

The FTC sued T-Mobile in July, accusing it of billing customers for subscriptions to text services like $9.99-per-month horoscopes or celebrity gossip updates that they didn't want or authorize.

T-Mobile collected 35 percent to 40 percent of the charges, even after being alerted by customers that they were bogus, the FTC alleges.

Advertisement

Officials told reporters on a conference call that the $90 million was a floor, not a maximum, for the amount that T-Mobile could end up paying. "It could be well north of $100 million," said Bill Sorrell, the attorney general of Vermont.

A T-Mobile spokeswoman said the company had no immediate comment on the settlement. T-Mobile began a refund program in July and has said it has notified current and former customers. The company didn't provide an estimate of how much it has paid in refunds to date.

Advertisement

Many consumers aren't aware that third-party companies can put charges on their phone bills for text services, regulators say.

T-Mobile US Inc., based in Bellevue, Washington, is controlled by Germany's Deutsche Telekom AG. It's the No. 4 U.S. cellphone carrier after Verizon Wireless, AT&T and Sprint.

Advertisement

Under the settlement, T-Mobile must provide full refunds to all its customers affected by the "cramming," and the amount it pays in refunds and fines must reach at least $90 million. If the payout doesn't reach that amount, the difference between what T-Mobile pays and $90 million will go to the FTC for additional relief to consumers, consumer education or other uses.

T-Mobile also must contact all of its affected customers, both current and former, to tell them about the refund program and how they can make a claim. That must be done in a "clear and conspicuous way," the FTC said. Going forward, T-Mobile must get customers' explicit consent before putting third-party charges on their bills. The company must clearly indicate any third-party charges on the bills.

The settlement with T-Mobile came two days after another federal regulator, the Consumer Financial Protection Bureau, sued rival Sprint Corp. for alleged cellphone "cramming." The CFPB is seeking an unspecified money penalty against Sprint.

"Mobile cramming is an issue that has affected millions of American consumers, and I'm pleased that this settlement will put money back in the hands of affected T-Mobile customers," FTC Chair Edith Ramirez said in a statement. "Consumers should be able to trust that their mobile phone bills reflect the charges they authorized and nothing more."
 

Get your daily dose of tech news, reviews, and insights, in under 80 characters on Gadgets 360 Turbo. Connect with fellow tech lovers on our Forum. Follow us on X, Facebook, WhatsApp, Threads and Google News for instant updates. Catch all the action on our YouTube channel.

Further reading: T Mobile, Telecom, US
Advertisement

Related Stories

Popular Mobile Brands
  1. These Vivo Smartphones Will Cost More in India Due to the Latest Price Hike
  2. Poco M8s 5G Debuts Globally With 7,000mAh Battery: See Price, Features
  3. Redmi A7 Pro 4G and Redmi A7 4G Launched in India With These Features
  4. Motorola Edge 70 Fusion Review
  5. Redmi Pad 2 SE 4G Debuts With 9.7-Inch Display, 7,600mAh Battery: See Price
  6. Oppo Find X9 Ultra Battery, Chipset Details Revealed Ahead of Global Launch
  7. Huawei Pura X Max With 5,300mAh Battery Launched at This Price
  8. Vivo Y600 Pro Could Launch Soon With This MediaTek Dimensity Chip
  1. Deezer Claims 75,000 AI-Generated Songs Are Being Uploaded to the Platform Daily
  2. Heartbeat Season 2 OTT Release Date: Know When and Where to Stream This Medical Drama Online
  3. Vivo Y600 Pro Listings on Geekbench, Regulatory Databases Reveal Key Specifications, Features
  4. Redmi Buds 8 Launched With Up to 50dB ANC, Up to 44 Hours Total Battery Life: Price, Features
  5. Coinbase Rolls Out Crypto-Backed Loans in the UK as FCA Shapes Rules
  6. Redmi Pad 2 SE 4G Launched With Snapdragon 6s 4G Gen 2 SoC, 7,600mAh Battery: Price, Specifications
  7. Motorola Razr 2026 Launch Date Teased Alongside Design and Colour Options
  8. Redmi A7 Pro 4G Launched in India With Unisoc T7250 Chip Alongside Redmi A7 4G: Price, Specifications
  9. Google DeepMind Has Reportedly Assembled an A-Team to Take on Anthropic’s AI Coding Prowess
  10. Samsung Galaxy S27 Ultra Could Launch With Silicon-Carbon Battery Upgrade: Report
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2026. All rights reserved.