Business

T-Mobile Reaches $90 Million Settlement for “Cramming”

December 19, 2014, 12:29 PM HST
* Updated December 19, 12:43 PM
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The Department of Commerce and Consumer Affairs’ Office of Consumer Protection announced Friday that Hawai’i, along with 49 other states and the District of Columbia, the Federal Trade Commission, and the Federal Communications Commission, reached settlements with T-Mobile USA, Inc.

T-Mobile must pay $90 million for placing unauthorized charges for third-party services on consumers’ mobile telephone bills.

The number of T-Mobile customers in Hawai’i that received these types of charges, known as “mobile cramming,” are estimated to be about 61,000.

Generally, the charges are $9.99 per month for “premium” text message subscription services that include things like horoscopes, trivia, and sports scores that consumers did not request.

During the legal action taken, state and federal regulators alleged that cramming occurred when T-Mobile placed charges on consumers’ bills without knowledge or consent.

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“The action taken today by the Office of Consumer Protection achieves significant protections for Hawai’i T-Mobile customers. Unauthorized cramming of third-party charges on their mobile phone bills is now prohibited,” said OCP Executive Director Bruce B. Kim. “Anyone who believes that they may have been the victim of such deceptive practices should contact T-Mobile as soon as possible to see if they qualify for a refund.”

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In October, AT&T faced a $105 million settlement for similar accusations regarding cramming.

T-Mobile and AT&T were the first of four major mobile carriers that announced they would stop billing customers for commercial PSMS. The other two carriers to agree were Verizon and Sprint.

The terms of T-Mobile’s settlement require the company to provide each victim of cramming who files a claim an opportunity for a full refund. T-Mobile is required to pay at least $90 million, $67.5 million of which will go to customers, $18 million to the states affected, and $4.5 million to the FCC.

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Individuals who were victims of cramming can submit a claim at the T-Mobile refund website.

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