T-Mobile has put $50M aside for cramming refunds

As we have previously discussed, T-Mobile is currently in talks with the Federal Trade Commission to settle charges from their involvement in the practice of “cramming”, which involves wireless carriers allowing third-parties to bill customers for Premium SMS services. The carriers are then given a portion of the money collected by the third-parties.

Now, Wireless Week points out that over the past two quarters, T-Mobile has accrued more than $50 million to cover the estimated cost of a refund program and settlement payments that likely will occur when the FTC and T-Mobile come to a settlement.

According to an SEC filing, in the second quarter T-Mobile accrued a $24 million reduction to service revenues to cover the estimated cost of a refund program. For the third quarter the carrier accrued an additional $29 million to cover anticipated settlement payments regarding an ongoing FTC lawsuit over cramming. – Wireless Week

Of course, T-Mobile made many millions off the cramming scam (as did other carriers). According to some reports, AT&T, Sprint, and T-Mobile made millions off these scams which was costing customers roughly two billion dollars per year.

Recently, AT&T agreed to pay the FTC over $100 million to settle a similar cramming charge.