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T-Mobile will pay at least $90 million to settle FTC cellphone 'cramming' lawsuit

T-Mobile will pay at least $90 million to settle FTC cellphone 'cramming' lawsuit

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T-Mobile has agreed to pay at least $90 million to settle a lawsuit that accused the wireless carrier of placing unwanted, third-party charges on its customers cell phone bills, a practice commonly referred to as "cramming." The FTC filed its suit back in July, claiming that T-Mobile charged unwitting customers fees for "premium" SMS-based services that offered junk content like flirting tips, horoscope information, or celebrity gossip. These services typically cost $9.99 a month; T-Mobile is now required to pay back all affected customers. In addition to paying that sum back, the carrier will also have to pay $18 million in fines to the attorneys general of all 50 states as well as another $4.5 million directly to the FTC.

"Today's settlement is a win for consumers who have been victimized by cramming," said FCC chairman Tom Wheeler in a statement. "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."

T-Mobile is hardly the only carrier under scrutiny for such practices — earlier this fall, AT&T settled its own FTC lawsuit for $105 million. Similar to this T-Mobile lawsuit, most of that money is going back to consumers, with similar fees being paid to the states and FTC. And it looks like Sprint may be next — reports indicated that the FTC would bring another $105 million lawsuit against the carrier, though the suit hasn't officially be filed just yet.