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T-Mobile paying $90 million to settle 'cramming' charges
With the myriad array of items on a monthly phone bill, it’s no wonder customers are dazed and confused. There’s the data plan, the calling plan, overtime usage fees, device instalments, and who knows what else. That’s the problem actually: carriers know, but they aren’t so inclined to tell.
T-Mobile is one such carrier, and it’s now been ordered to pay out $90,000,000 to U.S. customers in a settlement reached with the FTC and FCC. The problem was that, until 2013, the Uncarrier made use of a billing strategy called cramming. Specifically, Legere’s legion was illegally charging customers for the use of services they didn’t request or require: premium SNS content for wallpapers, horoscopes, ringtones and more.
Although T-Mobile ended this practice a couple of years ago, the matter itself hadn’t been settled, with angry, scammed customers demanding compensation. The charges could amount to as high as $14 per month, and due to the ambiguous nature of their billing (incoherent streams of numbers or letters) customers essentially had no idea what they were being paying for. Take a look:
At times like this, it’s important for the government to step in and make change happen. Here’s what Tom Wheeler, Chairman of the FCC had to say on the issue, both to ensure fair business practices and to advocate for the victims:
“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.”
$22.5 million of the settlement will be allocated to the government ($18 million to the 50 States/Washington DC, and $4.5 million to the U.S. Treasury) with the remainder earmarked for customer refunds. T-Mobile is also prepared to give more money if the payout exceeds the remainder. All customer refund requests will be honored (assuming of course, the claim is legitimate).