T-Mobile is in the crosshairs of a lawsuit by the Federal Trade Commission alleging it bilked customers out of hundreds of millions of dollars via bogus charges. The complaint and potential decision in the lawsuit could have a ripple effect throughout the mobile marketplace. From Fox 32:
“The complaint alleges that T-Mobile billed consumers for subscriptions to premium text services such as $10-per-month horoscopes or updates on celebrity gossip 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 in a statement. ‘The FTC’s goal is to ensure that T-Mobile repays all its customers for these crammed charges.’ ”
In a statement, T-Mobile called the allegations “unfounded and without merit.”
The practice of signing up customers for bogus third-party charges, also known as “cramming,” is nothing new and something that T-Mobile doesn’t really deny happening. The problem is with how T-Mobile presented the charges to their customers, according to the FTC. From MSN:
“In this case, the FTC said, most T-Mobile customers never agreed to sign up for the services but were billed anyway.
“T-Mobile says it tried to put consumer protections in place, but that many of the third-party vendors acted irresponsibly. The FTC counters that T-Mobile should have been tipped off that these text services were scams because of the high rate of customer complaints.
“The FTC also alleges that T-Mobile often hid the charges, making it almost impossible for customers to protest. Regulators estimate that T-Mobile kept as much as 40 percent of the bogus charges, resulting in hundreds of millions of dollars.”
Read more at uproxx.com.