T-Mobile paying up to $90M in refunds for unwanted services

FILE - In this Sept. 12, 2012 file photo, a man uses a cellphone as he passes a T-Mobile store in New York. T-Mobile on Tuesday, Dec. 16, 2014 announced it is now letting customers carry over their unused cellular-data allotments for up to a year. (AP Photo/Mark Lennihan, File)

WASHINGTON (AP) – 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.

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.

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