T-Mobile has settled with the government over claims the wireless carrier aided cramming and turned a blind eye to the practice because it was profitable. Earlier this year the FTC sued T-Mobile over the practice, and now the FTC says T-Mobile will pay at least $90 million to customer refunds. According to the FTC announcement, in addition to the $90 million in refunds, T-Mobile will be paying $18 million in fines and penalties to the attorneys general of all 50 states and $4.5 million to the FCC.
Cramming involves smaller companies signing consumers up for horoscope, "premium text message," or other services they may not want, then charging them a $10 fee.
The FTC notes that complaint rates were so high T-mobile couldn't help but be aware the scams were taking place, but turned a blind eye to the practice because, like the other big three carriers, wireless operators stand to skim up to 40% off the top of sales of such services.
As with AT&T, the FTC notes that T-Mobile not only turned a blind eye to the practice of cramming, they intentionally made the line-item details on user bills difficult to understand.
For years I've noted that while the government liked to take smaller companies quickly to task for cramming to score easy legal wins and political points, they've long ignored the role larger telecom carriers play in the practice, in no short part due to these companies campaign contributions and political power.
This trend has been clearly been changing with the recent
$105 million settlement with AT&T, and the rumored-to-be-looming
settlement with Sprint. Of course the amount these companies are paying in fines are only likely a very small fraction of the profits gleaned from these sleazy efforts.