T-Mobile to pay $90 million in settling FTC cramming case

The mobile provider has agreed to refund its customers for unwanted third-party charges placed on phone bills to the total sum of approximately $90 million.

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Some T-Mobile customers can look forward to reimbursement checks in their holiday stockings this year following a settlement with the Federal Trade Commission on Friday.

Following a 5-0 Commission vote approving the proposal, the mobile provider has agreed to refund its customers for unwanted third-party charges placed on phone bills to the total sum of approximately $90 million.

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But that's not all actually.

On top of the $90 million redress, T-Mobile is also shelling out another $18 million in fines and penalties to the attorneys general of all 50 states and the District of Columbia and $4.5 million to the Federal Communications Commission (FCC).

The FTC originally filed its lawsuit against T-Mobile in July at the U.S. District Court for the Western District of Washington. The federal agency alleged T-Mobile received 35 to 40 percent of every unwanted third-party charged placed on monthly phone bills.

Example charges, as highlighted by the FTC, include "horoscopes, love tips and celebrity gossip." Some of these charges were said to cost as much as $9.99 per month on average.

But the FTC's real problem with these charges was how they were presented (or rather not presented) to customers being that they were often buried down pages and pages in monthly statements, bringing new meanings to "reading between the lines" and "the fine print."

The FTC lambasts the practice as "mobile cramming," defined as "a modern version of a long-time scam in which consumers' phone bills are used as a vehicle for unauthorized charges placed by third parties."

FTC Chairwoman Edith Ramirez reiterated those arguments against mobile cramming in a statement on Friday, arguing it is "an issue that has affected millions of American consumers."

"I'm pleased that this settlement will put money back in the hands of affected T-Mobile customers," Ramirez continued. "Consumers should be able to trust that their mobile phone bills reflect the charges they authorized and nothing more."

Image via the FTC

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