FTC Charges T-Mobile with Forcing Bogus Charges on Customers
Cell phone provider T-Mobile has been accused of “cramming” its customers with unauthorized charges from scammers and making enormous sums of money off the practice.
The Federal Trade Commission (FTC) says the telecommunications company has profited from third parties that offer “premium” text-messaging services to T-Mobile customers. Consumers often wind up being charged $9.99 a month for these services, such as horoscope information or celebrity gossip, without ever approving them.
In the process, T-Mobile has raked in as much as 40% of the amount of the bogus charges, which has totaled in the hundreds of millions of dollars. The company in some instances continued to bill its customers for years after it was aware that the charges were fraudulent, according to the FTC.
“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,” FTC Chairwoman Edith Ramirez said in a prepared statement. “The FTC’s goal is to ensure that T-Mobile repays all its customers for these crammed charges.”
T-Mobile also has been faulted by federal regulators for burying the charges within lengthy—sometimes more than 50-page—phone bills that have “made it nearly impossible for consumers to find and understand” them.
For example, an unauthorized charge might appear on a customer’s bill as: “8888906150BrnStorm23918.” The numeric jargon would leave a consumer with no understanding of what the item was, making it more difficult for them to contest the expense. In fact it was for trivia text alerts.
In cases where customers did contest the charges, the FTC says, T-Mobile often offered only a partial refund, or directed customers to contact the scammers directly, without telling them how to do it.
The FTC is seeking a court order to permanently prevent T-Mobile from engaging in mobile cramming and to obtain refunds for consumers and disgorgement of T-Mobile’s ill-gotten gains.
To Learn More:
FTC Alleges T-Mobile Crammed Bogus Charges onto Customers’ Phone Bills (Federal Trade Commission)
FTC Charges T-Mobile with Cramming (Corporate Crime Reporter)
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