After fining AT&T a record $105 million dollars for cramming, the FCC just settled with T-Mobile for at least $90 million dollars for the same practice. Cramming is defined by the FCC as:
(i) engaging in an unjust and unreasonable practice of billing consumers for products or services they had not authorized; and (ii) failing to provide a brief, clear, non-misleading, plain language description of the third-party charges on the telephone bills sent to consumers.
What this means is T-Mobile was billing its customers for unauthorized third-party apps and not providing refunds. In some instances T-Mobile had provided full refunds, but in more cases they either gave partial or no refunds to its customers citing, “the inability to do nothing about it”. Instead of offering refunds, T-Mobile told their customers to seek refunds from the third-party merchants without giving them accurate information to contact said merchant.
The third-party charges included such services such as ringtones, wallpapers, horoscopes, flirting tips, celebrity gossip, and more. Prices for these services ranged from $0.99 to $14.99 per month.
Of the $90 million dollars, $67.5 is slated to go directly to the affected consumers. But if the number exceeds that amount, T-Mobile has agreed to pay 100% of all claims beyond the amount set aside for consumers.
FCC Chairman Tom Wheeler made this statement:
“Cramming is a significant problem. For too long, millions of consumers have been scammed –billed for bogus charges on their phone bills for services they didn’t request. This is unacceptable.Today’s settlement is a win for consumers who have been victimized by cramming. It means compensation for T-Mobile customers who were fraudulently billed for third-party services that they did not want or authorize. And it goes one step further. Today’s action will also help protect all of T-Mobile’s customers from bogus third-party charges in the future.” “The FCC remains committed to protecting consumers from cramming as well as any unjust and unreasonable business practices committed by the nation’s carriers. Protecting consumers from unauthorized fees on their phone bills is a team effort. The FCC, FTC, CFPB and state Attorney Generals have critical roles in protecting consumers from cramming. Earlier this year the FCC along with the FTC and state partners announced a historic settlement with AT&T for similar mobile cramming violations. I look forward to working with our federal and state partners in to crack down on cramming and protect America’s consumers.” -FCC-