PHOTO BY JOHN MACDOUGALL / AFP
WASHINGTON -- The Federal Trade Commission charged cell phone carrier and local institution T-Mobile USA of making hundreds of millions of dollars in bogus charges on customer's cellphone bills under the guise of "premium" SMS subscriptions that were never authorized by customers.
The FTC alleges T-Moble charged consumers for unauthorized subscriptions to content such as "flirting tips, horoscope information or celebrity gossip," that typically cost $10 per month; a practicey known as cramming.
T-mobile, which allegedly saw 30-40 percent of these proceeds, kept charging consumers years after the company learned the charges were fraudulent and not subscribed to by the user, even after thousands of users notified the company of the charges.
"It's wrong for a company like T-Moblie to profit from scams against its customers when there were clear warning signs the charges it was imposing were fraudulent," the FTC Chairwoman's Edith Ramirez said.
Below is an example of a T-Mobile Bill, with the unauthorized charges underlined:
The FTC has alleged that because such a large number of people were seeking refunds, it was an obvious sign to T-Mobile that the charges were never authorized by its customers.
The FTC said the group is striving to make sure T-Mobile pay back it's customers because of the "deceptive and unfair" practices.
T-Mobile responded to the FTC's complaint, calling it "unfounded and without merit."
Recently, the FTC has made significant actions to end mobile cramming, the trade commission said.