Remember how back in late 2013, AT&T, Sprint, and T-Mobile entered into an agreement with 45 states to stop billing customers for premium SMS fees? Just recently, T-Mobile reached a $90 million settlement with federal and state law enforcement, based on charges assessed to customers through premium SMS billing.
As part of a $90 million, T-Mobile will pay $18 million in fines and penalties to the attorneys general of all 50 states and the District of Columbia and $4.5 million to the Federal Communications Commission.
Just how big of a problem did premium SMS fees become in the United States before the carriers agreed to ban it? It’s estimated that every year, premium SMS fees costs consumers nearly $2 billion in additional charges on their wireless bills.
It’s crazy that many premium SMS fees that T-Mobile was charging consumers for, had refund rates of up to 40 percent. Why did T-Mobile allow this to happen? The FTC filed suit against T-Mobile, alleges that T-Mobile placed millions of dollars in unwanted third-party charges on its customers’ mobile phone bills, receiving 35-40% of every premium SMS fee they charged, which was typically billed at $9.99 per month.
Under the terms of its settlement with the FTC, T-Mobile is being ordered to contact all of its customers that were charged for premium SMS fees – current and former – to inform them of the refund program and claims process.