FTC: T-Mobile made millions with bogus charges

WASHINGTON (AP) -- 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.

"It's wrong for a company like T-Mobile to profit from scams against its customers when there were clear warning signs the charges it was imposing were fraudulent," said FTC Chair Edith Ramirez in a statement. "The FTC's goal is to ensure that T-Mobile repays all its customers for these crammed charges."

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 on certain services.

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.

T-Mobile did not immediately respond to a request for comment. Headquartered in Bellevue, Washington, T-Mobile US, Inc., is a publicly traded company. According to its website, Deutsche Telekom AG maintains a 67 percent ownership in the company's common stock.

Sprint Corp., the third-largest cellphone carrier, is in talks to buy T-Mobile US Inc., according to published reports. Analysts believe such a link-up would face stiff opposition from the same regulators who blocked AT&T from buying T-Mobile in 2011.

T-Mobile's stock fell 10 cents to $33.52 in afternoon trading.

---

Associated Press writer Anick Jesdanun contributed to this report.

Print this article Back to Top

Comments

or Subscribe now so you can share your opinion! It’s only a penny for a month trial.

Latest Forecast
More Technology News
Movie sparks disturbing online
Movie sparks disturbing online "purges"

Teens post risqué or obscene photos and malicious comments on social media in reaction to a film opening Friday.

Why Microsoft is eliminating thousands of jobs
Why Microsoft is eliminating thousands of jobs

Ahead of its second-quarter earnings call on Tuesday, Microsoft is in the headlines for something other than its financial comings and goings. 

Why is Montel Williams following me on Twitter?
Why is Montel Williams following me on Twitter?

According to some, Montel Williams, former talk show host and outspoken celebrity, has a curiously active Twitter account. 

Tech Q&A: Treat your iPhone like a camera
Tech Q&A: Treat your iPhone like a camera

Find out the best ways to move photos from a phone to a personal computer. 

What happens to your FB account when you die?
What happens to your FB account when you die?

When you die, should your loved ones have access to your Facebook, Gmail and other online accounts?

Got a rash? iPad, other devices may be cause
Got a rash? iPad, other devices may be cause

Unexplained rash? Check your iPad. It turns out the popular tablet computer may contain nickel, one of the most common allergy-inducing metals.

10 tweets that may make LeBron's return awkward
10 tweets that may make LeBron's return awkward

A look back at angry tweets from Cleveland Cavaliers fans in 2010 may make Lebron James' return to the city a little awkward.

LeBron heads home: a digital review
LeBron heads home: a digital review

Each week, we round up the digital news that had everyone talking. Read on to see what you missed! 

Social media response to Lebron coming home
Social media response to Lebron coming home

Lebron James announces his return to Cleveland and his home in Northeast Ohio.

WATCH: Local MDs test new device for sleep apnea
WATCH: Local MDs test new device for sleep apnea

Millions of Americans stop breathing at night. The Christ Hospital is running clinical trials to help sleep apnea patients sleep easier.