T-Mobile has agreed to pay $90 million as the settlement for the lawsuit filed against the “un-carrier” by the US Federal Trade Commission. If the courts approve this settlement, T-Mobile will have to pay $4.5 million to the FCC as well as $18 million as fines and penalties to the 50 states and the District of Columbia. It has been reported that the customers of this carrier will be receiving a full refund for alleged bill cramming by T-Mobile.
The FTC Chairwoman Edith Ramirez said in a statement “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.”
As the consumers will be getting the $90 million as a refund from T-Mobile, the FTC will also watch the progress carefully throughout the refund process. If T-Mobile fails to issue refunds to consumers (at least $90 million) then the difference amount will have to be returned to the Federal Trade Commission for the appropriate refund process to T-Mobile customers.
Earlier in July 2014, the US authorities have filed a written complaint against T-Mobile, accusing the company of imposing bogus amounts on the bills of the customers. According to the complaint launched, T-Mobile has been accused of ‘Cramming’ which is the act of charging users with false bills.
The majority of the issues in this regard arose from the various subscriptions like horoscope, gossips of the celebrity world. Most of them are charged at about $9.99 per month. According to the reports submitted by the Federal Trade Commission, more that 30% of the income for T-Mobile comes from such subscriptions. But the trouble was that most of the users claim that they never actually subscribed for any such things.
This isn’t the first time a company facing the “Cramming” lawsuit in the US. Earlier this fall, the FTC has filed a lawsuit against AT&T over the same issue. Later, AT&T came to settle the lawsuit with the government by paying $105 million. Almost 2 years ago, Verizon, AT&T, T-Mobile and Sprint have agreed to stop billing its customers for those “non-sense” services like horoscope and gossips that were stemmed from the third-party sources.
When the FTC alleged about T-Mobile’s bogus bills, the CEO of the company John Legere stated that those allegations were “baseless and without merit.” But it seems the allegations were true and with merit,” as the company lost a whopping $100 million.