T-Mobile to Refund Customers $90M

December 19th, 2014

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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.

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The practice of charging customers for cell phone services that they did not request or approve.

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