T-Mobile to Refund Customers $90M
December 19th, 2014
The self-proclaimed “most pro-consumer company in the industry” will soon have to disclose to consumers exactly how anti-consumer it’s been.
After facing FTC allegations that it bilked hundreds of millions of dollars from customers by hiding unauthorized third-party charges in their phone bills — in a practice called cramming — T-Mobile has agreed to a proposed settlement in which the so-called “un-carrier” will pay out at least $90 million in full customer refunds.
According to the FTC:
Under the terms of the settlement, T-Mobile will be required to offer full refunds to all affected consumers. The settlement requires T-Mobile to contact all of its crammed customers – current and former – to inform them of the refund program and claims process, and to do so in a clear and conspicuous way.
That should make for some awkward phone calls. The proposed agreement also calls for T-Mobile to obtain “consumers’ expressed informed consent before placing third-party charges on their bills,” the FTC said.
If approved by the court, the settlement would require that T-Mobile cough up $18 million in fines and penalties to the U.S. attorneys general and $4.5 million to the FCC.
The announcement of the proposed settlement comes two months after AT&T agreed to settle similar cramming allegations to the tune of $105 million and just two days after the Consumer Financial Protection Bureau sued Sprint for allegedly placing the same type of unauthorized charges on customers’ phone bills.
T-Mobile did not respond to a request for comment Friday afternoon.
For more of our coverage on phone bill cramming, click here.
The practice of charging customers for cell phone services that they did not request or approve.