T-Mobile to Pay $90 Million to Settle Case Led by Texas AG

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AUSTIN, Texas — T-Mobile has settled a nationwide investigation of illegal billing practices with Texas, 49 states, and various federal agencies this month, agreeing to fully refund customers any unauthorized charges. T-Mobile was accused of allowing “cramming,” an illegal practice where customers are enrolled in and charged for third-party services that they never authorized, such as ringtones or text message trivia subscriptions.

The Texas Attorney General’s Office announced that the multi-state effort had reached a $90 million settlement with the cellphone carrier to compensate current and former customers who had been unlawfully charged by third-parties. The Texas AG’s Internet and Privacy Team helped to lead the nationwide investigation into charges that T-Mobile had “facilitated unscrupulous content providers’ mobile cramming.”

The agreement guarantees that T-Mobile will pay out at least $90 million in fines and refunds to resolve the case. The FCC will take $4.5 million, and the states will split $18 million, with Texas getting over $1 million, which will help pay its legal fees. The remaining $67.5 million will go to consumer refunds, but T-Mobile’s liability is uncapped — it will have to fully compensate everyone who was affected, even if the refunds ultimately exceed $90 million. In addition, T-Mobile agreed to reform its billing practices by requiring customers’ express authorization for any third-party services, as well as placing all foreign charges in a clearly labeled section of their monthly bill.

Current and former T-Mobile customers who were victims of cramming are eligible for a full refund. T-Mobile has already begun issuing refunds, but customers can also submit claims and find out more information at www.t-mobilerefund.com. The investigation was conducted by the 50 states, Washington, DC, the Federal Trade Commission, and the Federal Communications Commission.