The Federal Trade Commission accused wireless carrier T-Mobile of adding bogus charges totaling "hundreds of millions of dollars" on customers' accounts without their consent.
At least as far back as 2009 until at least December 2013, the carrier placed unauthorized charges for third-party services on customers' mobile phone bills, a practice called "cramming," the agency alleges in a suit filed today in U.S. District Court. The FTC says T-Mobile also made it difficult for its customers to detect the charges.
The FTC's case against T-Mobile would likely be the largest "cramming" case brought by federal authorities. This is the first "cramming" action that the FTC has brought against a phone provider, but the agency has previously taken action against 30 companies for the practice, said Jessica Rich, the FTC's director of consumer protection.
T-Mobile CEO John Legere called the FTC's complaint "unfounded and without merit. In fact, T-Mobile stopped billing for these Premium SMS services last year and launched a proactive program to provide full refunds for any customer that feels that they were charged for something they did not want."
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The FTC's case says that the charges were typically for third-party content such as flirting tips, horoscope information or celebrity gossip and amounted to $9.99 per month. Usually, when customers see a third-party service in an advertisement, they must opt-in twice before charges can be added to their mobile phone bill.
However, in many cases deceptive advertisements hid the fact that the consumer was agreeing to the charges, said FTC attorney Brian Shull. And, in other cases, the third-party merchants were "just buying phone numbers from random places and billing these consumers without any notice whatsoever," he said.Read the rest of the story HERE.
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