T-Mobile US, Inc.

T-Mobile USA agreed in December 2014 to provide at least $90 million in refunds and other payments to resolve a Federal Trade Commission lawsuit concerning unauthorized third-party charges placed on customers' mobile phone bills, a practice known as mobile cramming. The FTC alleged that T-Mobile billed consumers for recurring third-party subscriptions for services such as horoscopes, celebrity gossip and flirting tips that often cost $9.99 per month. According to the FTC, many consumers had never authorized the charges. The FTC alleged that T-Mobile retained approximately 35 to 40 percent of the amounts charged to consumers for the third-party subscriptions. The complaint further alleged that unusually high refund rates for some subscription services should have alerted T-Mobile that many customers had not authorized the charges. The FTC also alleged that T-Mobile made the charges difficult for consumers to identify by burying them in lengthy bills or describing them using unclear billing labels. Under the settlement, T-Mobile agreed to provide full refunds to affected consumers, with total redress and other payments required to reach at least $90 million. The settlement also included $18 million in fines and penalties paid to state attorneys general and $4.5 million paid to the Federal Communications Commission. T-Mobile was also required to obtain express informed consent before placing third-party charges on customers' bills and to provide consumers with clearer notice and blocking options. Primary sources: Federal Trade Commission — T-Mobile to Pay At Least $90 Million, Including Full Consumer Refunds: https://www.ftc.gov/news-events/news/press-releases/2014/12/t-mobile-pay-least-90-million-including-full-consumer-refunds-settle-ftc-mobile-cramming-case FTC case record: https://www.ftc.gov/legal-library/browse/cases-proceedings/132-3231-t-mobile-usa-inc