WASHINGTON – T-Mobile USA knowingly made hundreds of millions of dollars off its customers in potentially bogus charges, a federal regulator alleged Tuesday in a complaint likely to mar the reputation of a household name in wireless communications.
In its complaint filed in a federal court in Seattle, the Federal Trade Commission claimed that T-Mobile billed consumers for subscriptions to premium text services such as $10-per-month horoscopes that were never authorized by the account holder. The FTC alleges that T-Mobile collected as much as 40 percent of the charges, even after being alerted by other customers that the subscriptions were scams.
The Federal Communications Commission has launched a separate inquiry into T-Mobile’s billing practices, which could result in fines if it finds any wrongdoing.
The practice is often referred to as “cramming”: businesses stuff a customer’s bill with bogus charges associated with a third party. In this case, the FTC says T-Mobile should have realized that many of these premium text services were scams because of the high rate of customer complaints. In some cases, the FTC says, as many as 40 percent of customers demanded refunds in a single month.
The FTC said one way for consumers to try to prevent fraudulent charges is to ask their providers to block all third-party businesses from providing services on their phones.