T-Mobile to Pay $90 Million to Settle Cramming Case

2 minute read
T-Mobile
An employee sets up a new Samsung Electronics Co. Galaxy 3 smartphone for a customer at a T-Mobile US Inc. retail store in Torrance, California, U.S., on Monday, Nov. 4, 2013.Bloomberg—Bloomberg via Getty Images
By TIME Staff

T-Mobile has agreed to pay at least $67.5 million in customer refunds to settle claims that its customers were the victims of cramming, the Federal Trade Commission said Friday. Cramming is a once-common tactic in the telecom industry through which third parties hide unwanted charges for things like horoscopes and love tips in customers’ wireless bills.

In addition to the refunds, T-Mobile will pay $18 million in fines and penalties to attorneys general in every state and Washington D.C., as well as a $4.5 million fine to the Federal Communications Commission.

“Mobile cramming is an issue that has affected millions of American consumers,” FTC Chairwoman 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.”

The FTC originally filed a lawsuit against T-Mobile over cramming claims in July. At the time, T-Mobile CEO John Legere, who has staked the company’s reputation on being more fair to customers than rival wireless carriers, called the allegations “unfounded and without merit.” T-Mobile did not immediately respond to a request for comment Friday.

T-Mobile will be required to contact all current and former customers who had unwanted charges crammed into their bills and offer them refunds. The company will also have to get customers’ consent before putting third-party charges on their bills in the future.

The T-Mobile case is the latest in a series of cramming settlements that the FTC has brokered. AT&T agreed to pay $105 million in refunds and fines for cramming charges in October.

PHOTOS: The Rise of Mobile Phones from 1916 to Today

A German field telephone station in the Aisne department of northern France during World War I.
1916 A German field telephone station in the Aisne department of northern France during World War I.Paul Thompson—FPG/Getty Images
French singer and actor Johnny Hallyday in a scene from the film 'Point de Chute' (aka 'Falling Point').
1970 French singer and actor Johnny Hallyday in a scene from the film 'Point de Chute' (aka 'Falling Point').Keystone/Holton/Getty Images
An early mobile phone during the Iranian Embassy siege at Princes Gate in South Kensington, London.
1980 An early mobile phone during the Iranian Embassy siege at Princes Gate in South Kensington, London.Kypros/Getty Images
Bob Maxwell, general manager of Englewood-based Mobile Telephone of Colorado, places a call on FCC-approved radio frequency while driving to work.
1983 Bob Maxwell, general manager of Englewood-based Mobile Telephone of Colorado, places a call on an FCC-approved radio frequency while driving to work.Lyn Alweis—Denver Post/Getty Images
THE A-TEAM -- "The Say U.N.C.L.E. Affair" Episode 5. (l-r) Eddie Velez as Frankie Santana, Robert Vaughn as General Hunt Stockwell, George Peppard as John 'Hannibal' Smith.
1986 THE A-TEAM "The Say U.N.C.L.E. Affair" Episode 5. (l-r) Eddie Velez as Frankie Santana, Robert Vaughn as General Hunt Stockwell, George Peppard as John 'Hannibal' Smith.Bill Dow—NBC/Getty Images
Bill Clinton, Ray Flynn
1992 Democratic presidential nominee Bill Clinton talks on a cell phone while meeting with Boston Mayor Ray Flynn in a New York hotel on Sept. 25.Mark Lennihan—AP
Whoopi Goldberg during ShoWest in Las Vegas.
1993 Whoopi Goldberg during ShoWest in Las Vegas.Jeff Kravitz—FilmMagic/Getty Images
A farmer with his family sitting on a Bullock Cart and talking on a mobile Phone, in Delhi.
1997 A farmer with his family sitting on a Bullock Cart and talking on a mobile Phone, in Delhi.India Today Group/Getty Images
World Trade Center Terrorist Attack.
2001 A woman watches smoke pour out of the World Trade Center Towers in New York on September 11.Nicholas Goldberg—Gamma-Rapho/Getty Images
A rebel militiaman speaks on his mobile phone after capturing territory from government troops on March 25 2 in Ben Jawat, Libya.
2011 A rebel militiaman speaks on his mobile phone after capturing territory from government troops on March 25 in Ben Jawat, Libya. John Moore—Getty Images
A youth films the aftermath of tear gas police fired at protestors in Muhammed Mahmoud Street near Tahrir Square on November 23 in Cairo.
2011 A youth films the aftermath of tear gas police fired at protestors in Muhammed Mahmoud Street near Tahrir Square on November 23 in Cairo.Peter Macdiarmid—Getty Images
Audience members take pictures of President Barack Obama at Florida Atlantic University on April 10 in Boca Raton, Florida.
2012 Audience members take pictures of President Barack Obama at Florida Atlantic University on April 10 in Boca Raton, Florida. Marc Serota—Getty Images
A teenager takes a selfie in front of Queen Elizabeth II during a walk around St. Georges Market in Belfast.
2014 A teenager takes a selfie in front of Queen Elizabeth II during a walk around St. Georges Market in Belfast. The Queen has apparently voiced her dismay that when she carries out engagements she is greeted by a sea of mobile phones.Peter Macdiarmid—PA Wire/Press Association Images/AP

More Must-Reads from TIME

Contact us at letters@time.com