The Federal Trade Commission today filed suit against T-Mobile for failing to stop bogus charges on customers' bills.
In a complaint filed in federal court in Seattle, the FTC said that T-Mobile made "hundreds of millions of dollars" by charging customers for premium SMS subscriptions. These services - which ran $9.99 per month for things like flirting tips, horoscope information, or celebrity gossip - were added to T-Mobile users' bills by scammers without the customer's authorization.
When customers complained, however, T-Mobile continued to bill some users for years, the FTC said. The carrier then made anywhere from 35 to 40 percent of the total amount charged to consumers.
"T-Mobile knew about these fraudulent charges and failed to take any action," FTC Consumer Protection Director Jessica Rich said during a Tuesday conference call with reporters.
Meanwhile, the FTC alleges that T-Mobile's bills were so complicated that customers could not easily decipher what the excess charges covered. They were hidden in a section called "Usage Charges" and sometimes described by indecipherable letters and numbers, like "8888906150BrnStorm23918."
Ideally, the FTC wants the court to require T-Mobile to issue refunds to affected customers. Rich declined to provide an exact number of affected customers, saying only that "it's a lot of consumers." The complaint covers cases going back to 2009.
"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 statement. "The FTC's goal is to ensure that T-Mobile repays all its customers for these crammed charges."
T-Mobile did not immediately respond to a request for comment.
The FTC also said it is working with the Federal Communications Commission, which will probe T-Mobile's practices. Both agencies have tackled so-called phone cramming, with the FTC filing its first complaint last year