FTC: T-Mobile Crammed Bogus Charges Onto Bills

And made hundreds of millions in the process

By Kate Seamons,  Newser Staff

Posted Jul 1, 2014 2:54 PM CDT

(Newser) – If you're a T-Mobile customer, the following is unlikely to deepen your love for your mobile carrier. The FTC today filed a complaint alleging that T-Mobile has for years "crammed bogus charges onto customers' bills," making hundreds of millions in the process, per a press release on the matter. The FTC claims that T-Mobile took a 35% to 40% cut of the typically $9.99 per month cost of subscriptions that were, in many cases, not authorized by its customers. What kinds of subscriptions? "Flirting tips, horoscope information, or celebrity gossip." The practice is known as "cramming," explains the AP: businesses stuff a customer's bill with bogus charges associated with a third party. And the FTC alleges there were "clear warning signs the charges it was imposing were fraudulent": In some months, T-Mobile saw as many as 40% of customers demanding refunds, a rate the FTC feels should have raised red flags.

Further, internal company documents show the elevated level of complaints stretched back to at least early 2012. The FTC wants a court order barring T-Mobile from engaging in cramming, refunds, and "disgorgement of T-Mobile's ill-gotten gains." Writing for Consumerist, Chris Morran isn't impressed with T-Mobile CEO John Legere's response, which reads in part: "T-Mobile stopped billing for these Premium SMS services last year and launched a proactive program to provide full refunds for any customer that feels that they were charged for something they did not want." Writes Morran, "So there you go, America. T-Mobile shouldn't be sued for something it made a mountain of money from because it is no longer making that mountain of money and it’s offering refunds to customers who 'feel' they were charged for something they didn't order."

An Oct. 19, 2012, file photo of a T-Mobile store  in New York.
An Oct. 19, 2012, file photo of a T-Mobile store in New York.   (AP Photo/Mark Lennihan, file)
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