T-Mobile to pay $90 mn over US fraud charges

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.

T-Mobile to pay $90 mn over US fraud charges
Photo: DPA

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.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


EU Commissioner ‘to ban roaming fees by 2017’

European Digital Economy Commissioner Günther Oettinger said on Monday that he wants to abolish roaming fees for mobile phone users within the EU by 2017.

EU Commissioner 'to ban roaming fees by 2017'
No more worrying about how much texting from the beach costs? Photo: DPA

“From the second quarter of 2017, roaming fees in the EU will probably fall away,” the former minister-president of Baden-Württemberg told journalists in Bonn.

“The European Commission, the governments of the 28 member states and the European Parliament (EP) will probably agree on it very soon.”

Oettinger's announcement comes just over a month after the European Commission dropped plans to abolish roaming charges from 2016 after objections from telecoms companies in smaller member states.

But a new compromise had to be reached after consumers' organizations and the EP protested vociferously.

“If the end of roaming comes in 2017, companies have a year longer compared with the old plans to conform to the new rules,” Oettinger said.

“And consumers will see yet more that they profit from the single market in telecoms. Roaming fees have already sunk a great deal.”

Wave of mergers expected

Oettinger believes that the EU must consolidate its telecoms market – pointing to the 280 telecoms companies across Europe compared with four in the US.

“To become more competitive and consolidate their networks, many more companies will merge in the coming years.

“That should lead to the European telecoms industry playing a bigger role on the global stage. But competition has to be assured.”

The Commissioner hopes to arrange the European telecoms market such that, for example, people could use a self-driving car – “an important market for Germany's car manufacturers” – to travel seamlessly from one country to another.