After a long hearing, Icstis, the premium rate telephone services regulator, ruled that ads run by Jamba up until July 2005 misinformed the public as to the type of service they were buying.
As a result, 338 customers who complained to the regulator as well as thousands of consumers will get a refund -- as long as they can provide evidence they were overcharged.
Most customers believed they were texting for a one-off product, unaware they were actually signing up to a subscription service that would cost them £5 a week.
The Crazy Frog ringtone proved to be a massive success for ringtone firm Jamba, netting it an estimated £10m and becoming the first ringtone to make it to number one in the single charts.
Mblox responded to the ruling by saying it is considering requesting a judicial review of the interpretation of the Icstis code that has held mBlox responsible for the action of a third party, such as Jamba, which sold the Crazy Frog ringtone via its Jamster website.
A spokesman for Jamba it had improved its service since the complaints, said: "We believe that Jamster's current advertisements represent industry best practices that fully conform with industry guidelines and the Icstis code of practice.
"The adjudication also notes the improvements that we have made to our advertisements. We are also pleased that it acknowledges the advertisements have never deliberately targeted children."
MBlox said it will look to ensure that regulations are not breached by any content provider that supplies services to the public. In April, the company was fined £2,000 for a promotion that involved unsolicited text messages.
In 2005 Icstis received over 2,200 complaints regarding SMS subscription services.
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