WASHINGTON – T-Mobile US will issue up to $90 million in refunds for billing customers for cellphone text services they didn't order, under a settlement with federal regulators.
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The Federal Trade Commission announced the agreement Friday with T-Mobile over billing for unauthorized charges, a practice known as "cramming." T-Mobile, the fourth-largest U.S. cellphone company, also is paying $18 million in fines to the 50 states and the District of Columbia, and $4.5 million in fines to the Federal Communications Commission.
The FTC sued T-Mobile in July, accusing it of billing customers for subscriptions to text services like $9.99-per-month horoscopes or celebrity gossip updates that they didn't want or authorize.
T-Mobile collected 35 percent to 40 percent of the charges, even after being alerted by customers that they were bogus, the FTC alleges.