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T-Mobile to pay $90 million to settle US fraud charges

WASHINGTON: German mobile phone company T-Mobile has agreed to pay at least $90 million to settle US government claims that it bilked customers with bogus charges, US regulators said Friday.

The Federal Communications Commission said the fine would resolve an investigation into allegations that the company’s US unit billed customers millions of dollars in unauthorized third-party subscriptions and premium text messaging services.

“Cramming is a significant problem. For too long, millions of consumers have been scammed — billed for bogus charges on their phone bills for services they didn’t request,” said Tom Wheeler, FCC chairman, in a statement.

The agency said the settlement agreement will provide compensation for T-Mobile US consumers victimized by cramming, and help protect all of the company’s customers from bogus third-party charges in the future.

Under the terms of the settlement, T-Mobile will pay a minimum of $67.5 million to fund and operate a consumer program that will give refunds to victims of its unlawful cramming activities — and if consumer claims exceed that amount, T-Mobile will continue to pay them.

T-Mobile also will pay $18 million to the governments of all 50 states and the District of Columbia (Washington), plus a $4.5 million fine to the US Treasury.

Included consumer protections in the settlement require that T-Mobile no longer offer commercial third-party “premium SMS” charges and that it must obtain “express informed consent” from customers prior to allowing third-party charges on their phone bills.

Shares in T-Mobile US were up 1.0 percent at $26.17 in afternoon trade on the New York Stock Exchange.

In October, AT&T agreed to pay $105 million to resolve FCC wireless cramming allegations. – AFP

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