T-Mobile to Refund Customers $90 Million for Scam Bill Charges; Sprint Facing $105 Million Penalty?
T-Mobile customers will be receiving refunds from the U.S. network carrier amounting to at least $90 million, according to the Federal Trade Commission. The refund resulted from unwanted, third-party charges the company has reportedly placed on its customers' bills. FTC called the practice "mobile cramming."
"Mobile cramming is an issue that has affected millions of American consumers, and I'm pleased that this settlement will put money back in the hands of affected T-Mobile customers," FTC chairwoman Edith Ramirez explained in the report.
"Consumers should be able to trust that their mobile phone bills reflect the charges they authorized and nothing more," she added.
The complaint dates back July, as reported by PCMag. The outlet cited FTC's claim against T-Mobile, which revealed that the company billed its customers for premium SMS subscriptions -- these included unnecessary information such as flirting tips, horoscope trivia and celebrity gossip. Accordingly, T-Mobile has earned "hundreds of millions of dollars" out of these services.
Despite piling complaints, the FTC noted T-Mobile's persistence in charging some other users, said PCMag. Naturally, it's an unfortunate situation when one is forced to pay for something not needed, or worse, something not even requested.
T-Mobile's pending settlement is the second-largest resulting from "cramming," wrote Computerworld. It comes next to AT&T's agreement with the Federal Communications Commission (FCC), another case decided back in October. T-Mobile neither admitted nor denied the allegations in the recent settlement, said the outlet.
Meanwhile, The New York Times reported that T-Mobile's liability for refunds has no upper limit; meaning, it can stretch indefinitely, unless we hear otherwise.
Computerworld cited the breakdown of the company's responsibilities: at least $67.5 million will be used to fund a program set to repay its customers; $18 million will be paid to state governments involved in the settlement and $4.5 million will serve as penalty payment to the U.S. Treasury.
On the other hand, rival network carrier Sprint seems to be in holiday trouble, too. International Business Times reported earlier this week that the company has been sued by the Consumer Financial Protection Bureau (CFPB) for the similar case of "cramming." Specifically, the filing accused Sprint of allowing third party systems bill customers for unwanted services from 2004 to 2013. Allegedly, Sprint likewise earned millions of dollars in the process.
PCMag cited reports indicating that Sprint could also face penalties, this time amounting to $105 million.
Affected T-Mobile customers may apply for refunds here, said Computerworld.
Check out Zoe Holderness' visual description of mobile cramming below.