Washington -- T-Mobile USA knowingly made hundreds of millions off its customers in bogus charges, a federal regulator alleged Tuesday in a complaint likely to damage the reputation of a household name in wireless communications.
In its complaint filed in federal court, 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. "The FTC's goal is to ensure that T-Mobile repays all its customers for these crammed charges."
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. But while as many as 40 percent of customers demanded refunds, others didn't notice the charges.
Headquartered in Bellevue, Washington, T-Mobile USA, Inc., is a publicly traded company. According to its website, Deutsche Telekom AG maintains a 67 percent ownership in the company's common stock.