T-Mobile is in settlement talks with the Federal Trade Commission (FTC) over unauthorized premium charges on customers’ bills—a practice referred to as “cramming.”
According to Seattle court documents found by Bloomberg, T-Mobile and the FTC has requested the proceedings be put on hold for 90 days while both parties work out a settlement that will help avoid more litigation.
The FTC alleged that T-Mobile took in “hundreds of millions” in fraudulent charges from premium SMS services and continued to allow the practice after having sufficient evidence the transactions were not authorized by customers.
Shortly after the initial FTC complaint, T-Mobile CEO John Legere responded by saying that his company had not been involved in cramming since the 2013 agreement by all four major U.S. carriers to end the practice. He also said the revenue from it had never been substantial to T-Mobile and accused the FTC of exaggerating the claims.
“On Tuesday of this week, we all got to see Washington politics and the big carrier lobbyists at their best. While I love our democracy, I hate the way D.C. works some times, and I just could not sit still and let them get away with it,” Legere said in a blog post.
But now it appears the carrier is backing off the fight. Going into the new settlement talks, a T-Mobile spokeswoman told Bloomberg it’s about doing what’s right for customers.
T-Mobile’s move to settle over cramming comes just weeks after AT&T agreed to a similar settlement with the FTC as well as other federal and state authorities. As part of a $105 million settlement, AT&T will pay out $80 million in refunds to customers who have been fraudulently charged for PSMS services.
Last week, the FTC said it had already received 359,000 refund claims in the AT&T settlement, making it the busiest first week ever for the agency when dealing with this sort of case.