T-Mobile has agreed to pay at least $90 million to resolve accusations that the company billed customers millions of dollars for third-party subscriptions and premium text-messaging services they didn’t authorize, the Federal Communications Commission announced Friday.
Negotiated in coordination with the Federal Trade Commission and the attorneys generals of all 50 states and the District of Columbia, the cramming settlement is $15 million shy of a record $105 million settlement that AT&T agreed to earlier this year.
The Bellevue, Washington-based carrier has agreed to pay $67.5 million to fund a program that will support victims. T-Mobile will contribute additional funds if consumer claims exceed the amount above. The company also has agreed to set aside $18 million for a payment to state governments, and separately make a $4.5 million payment to the U.S. Treasury, the FCC said in a news release.
T-Mobile did not immediately respond Friday to a request for comment on the settlement.
The FCC launched its probe after T-Mobile consumers complained that they had been billed for unauthorized charges for subscriptions that generally cost $9.99 per month, according to the news release. In some cases, T-Mobile provided refunds while other aggrieved customers were not compensated, the Commission said.
The settlement includes provisions that are aimed to protect consumers, including a requirement that T-Mobile cease offering commercial third-party “premium SMS” charges.
T-Mobile also must obtain express informed consent from customers prior to assessing third-party charges, revise its billing practices to confirm such charges are clearly and prominently identified on bills, and offer a free service for customers to block third-party charges, the FCC said.
Over the last year, the FCC has taken seven enforcement actions against carriers for alleged cramming and slamming infractions. The AT&T settlement was the most notable, ranking as the largest enforcement action and biggest cramming settlement in the FCC’s history.
“For too long, millions of consumers have been scammed — billed for bogus charges on their phone bills for services they didn’t request,” FCC Chairman Tom Wheeler said Friday in a statement.