(NEW YORK) — The Federal Trade Commission (FTC) accused cell phone provider T-Mobile of billing customers hundreds of millions of dollars in false charges.
The FTC claims T-Mobile knew its customers had not authorized numerous text-messaging charges and knowingly made it difficult for users to determine that they were even being charged. The charges are specifically related to “premium” SMS subscriptions, such as those commonly seen for content like flirting tips, horoscopes or celebrity gossip. The FTC says that T-Mobile continued to bill users for the content despite signs that the charges were fraudulent.
T-Mobile, the FTC says, received 35 to 40 percent of the amount customers were charged for the “subscriptions” as part of a third-party billing scheme. The government agency is aiming to, “ensure that T-Mobile repays all its customers for these crammed charges,” FTC Chairwoman Edith Ramirez said Tuesday.
In some cases, T-Mobile was allegedly charging customers for services with refund rates of 40 percent, a sign the FTC says should have indicated to the company that its users were not authorizing the charges.
The FTC says it is seeking a court order to permanently prevent T-Mobile from engaging in similar practices and to obtain refunds for the customers charged in the “cramming” scam.
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Kathryn Vasel, CNN
Alanna Petroff, CNN
Matt McFarland, CNN