T-Mobile to Refund Customers $90M
Proposed agreement with the FTC would settle cramming allegations.
In November 2015, a federal judge preliminarily approved a settlement of a class-action lawsuit against Asurion and T-Mobile.
The complaint, which was originally filed in 2006, alleged that Asurion misleadingly informed T-Mobile customers that cell phone insurance operated like any other insurance policy when such claims were actually not true because the word “deductible” in the policy was used in an atypical way. Specifically, plaintiffs claimed that, in the insurance industry, the “deductible” is the amount deducted from the amount of the loss incurred (i.e., if the loss is less than the deductible, the consumer will not be able to recover from the insurance company) but when used by Asurion, the “deductible” is a processing fee charged to consumers who file a claim for a replacement cell phone. In addition, the complaint alleged that the insurance policy did not adequately disclose that lost phones are routinely replaced with refurbished ones that are worth less than the lost phones.
According to the proposed settlement terms, class members may each receive a pro rata share (not to exceed $124) of the $4.2 million settlement fund after other expenses (including attorney fees, costs approved by the court, and notice expenses) are paid. The settlement agreement states that the companies agreed to enhance certain disclosures, including that cell phones may be replaced with refurbished or different equipment.
A final fairness hearing is scheduled for February 15, 2016. (Cole et al v. Asurion Corporation, T-Mobile USA, Inc., et al, Case No. 06-cv-6649, C. D. CA.)
Proposed agreement with the FTC would settle cramming allegations.
Wireless carrier joins AT&T and T-Mobile as companies accused of cramming this year.
Agency notes one participant in discussions called mobile cramming the “perfect scam.”
How the fine print factors into the FTC’s multimillion-dollar complaint against the mobile carrier.
Might as well jump!