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FTC: T-Mobile made millions in bogus charges

By Anne Flaherty

Associated Press

LAST UPDATED: 03:54 p.m. HST, Jul 01, 2014

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.

"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.

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CriticalReader wrote:
Just the beginning. Too bad the NCAA investigators aren't looking at TMobile.
on July 1,2014 | 08:48AM
HonoluluHawaii wrote:
Better that the NCAA didn't look at T-Mobile, because the NCAA would have found nothing considering the NCAA has no subpoena powers. I'm glad I'm with Micronesian Telecom.
on July 1,2014 | 09:17AM
gth wrote:
...and I was thinking of switching from Sprint to T-Mobile.
on July 1,2014 | 08:53AM
Surfer_Dude wrote:
Why bother. Sprint is merging with tmobile.
on July 1,2014 | 09:15AM
HonoluluHawaii wrote:
Now both Sprint and T-mobile are tarnished because weren't those two proposing a shotgun marriage?
on July 1,2014 | 09:18AM
loquaciousone wrote:
I like my mobile provider. All I need is two cans and a long string.
on July 1,2014 | 09:12AM
HonoluluHawaii wrote:
Well then your mobile provider is the late coconut wireless.
on July 1,2014 | 09:29AM
cojef wrote:
Nice quips, love the humor.
on July 1,2014 | 11:51AM
whaole wrote:
I suspected this was occurring long ago because I was probably more keenly aware of my cell phone usage then most. I made it a point to thoroughly review my bill each cycle. Not surprisingly, I not only found the unauthorized billings for the aforementioned items but also found several more which include ring tone services, premium weather & storm alerts, games and even video and music services. I called T-Mobile and told them I explained the circumstances and literally refused to pay for things I did not subscribe to. They were very good, didn't hassle me at all, removed the services and credited my account. While that may the plus side for T-Mobile, sadly it should not have happened at all.
on July 1,2014 | 09:53AM
mitt_grund wrote:
Yup, I was charged for internet services. I had specifically asked internet option to be excluded from two phones on my account. I supposedly accessed the Internet on three specific dates on one of those phones. But service people quickly removed the charges when I called. But what about those who just pay their bills without review? Talk about a captive audience. Shame on you, T-Mobile. You make HEI/HECO/Lau look like angels.
on July 1,2014 | 10:35AM
cojef wrote:
Use a prepaid cellphone with Verizon with a $100 deposit . Usually last a year so that indicate how often I use the cellphone. Wife has the same deal and she visits Verizon earlier than I. Have a regular phone with Verizon and monthly charges are under $25 per month. T-mobile uses the numbers game, if you have 10 million subscribers even at $1 per month it translate to $10 Million. That aint hay?
on July 1,2014 | 12:01PM
localguy wrote:
I've had the T-Mobile pay by the month plan for several years. Not once have I had an extra charge applied. Those with contracts may not have noticed an extra charge.
on July 2,2014 | 06:58PM
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