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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.

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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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