T-Mobile Settles Cramming Investigation

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As part of a $90 million global settlement, the FCC’s Enforcement Bureau (Bureau) and T-Mobile USA, Inc. (T-Mobile) have entered into a Consent Decree which resolves an investigation into allegations that T-Mobile charged its subscribers for third-party products and services that were not authorized, a practice that is referred to as cramming. The investigation focused on charges for Premium Short Message Services (PSMS) which are monthly subscription services that provide consumers with content such as ringtones, wallpapers, and horoscopes via a text message sent to their phone. T-Mobile allegedly received a percentage of monthly PSMS charges and actively prevented subscribers from removing them from their bills. Among other things, the Consent Decree requires T-Mobile to implement a compliance plan designed to ensure that its subscribers are only billed for charges they expressly authorize. Under the terms of the $90 million global settlement, T-Mobile will pay a minimum of $67.5 million to fund and operate a consumer redress program that will give refunds to victims of T-Mobile’s unlawful cramming activities; $18 million to state governments participating in the settlement; and a $4.5 million penalty to the U.S. Treasury.

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