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FTC: T-Mobile Allowed Bogus Charges on Customer Bills

 & Chloe Albanesius Executive Editor, News

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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

About Our Expert

Chloe Albanesius

Chloe Albanesius

Executive Editor, News

My Experience

I started out covering tech policy in DC for The National Journal, where my beat included state-level tech news and all the congressional hearings and FCC meetings I could handle. I later covered Wall Street trading tech before switching gears to consumer tech. I now lead PCMag's news coverage.

My Areas of Expertise

Getting my start in DC means I still have a soft spot for tech policy; Congressional hearings can sometimes be as entertaining as a Bravo reality show, for better or worse. But PCMag is all about the technology we use every day, as well as keeping an eye out for the trends that will shape the industry in the years ahead (or flop on arrival). I've covered the rise of social media, the iOS vs. Android wars, the cord-cutting revolution that's now left us with hefty streaming bills, and the effort to stuff artificial intelligence into every product you could imagine. This job has taken me to CES in Vegas (one too many times), IFA in Berlin, and MWC in Barcelona. I also drove a Tesla 1,000 miles out west as part of our Best Mobile Networks project. Of late, my focus is on our hard-working team of reporters at PCMag, guiding and editing their robust coverage.

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