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FTC: T-Mobile knowingly bilked customers for millions with bogus charges

FTC T-Mobile: In its complaint filed in a federal court in Seattle, 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. 

T-MobileÌýUSA knowingly made hundreds of millions of dollars off its customers in potentially bogus charges, a U.S. government regulator alleged Tuesday in a complaint likely to mar the reputation of a household name in wireless communications.

In its complaint filed in a federal court in Seattle, the Federal Trade Commission claimed thatÌýT-MobileÌýbilled consumers for subscriptions to premium text services such as $10-per-month horoscopes that were never authorized by the account holder. TheÌýFTCÌýalleges thatÌýT-MobileÌýcollected 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 likeÌýT-MobileÌýto profit from scams against its customers when there were clear warning signs the charges it was imposing were fraudulent," saidÌýFTCÌýChair Edith Ramirez in a statement. "TheÌýFTC'sÌýgoal is to ensure thatÌýT-MobileÌýrepays all its customers for these crammed charges."

The Federal Communications Commission has launched a separate inquiry into T-Mobile's billing practices, which could result in fines if it finds any wrongdoing.

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, theÌýFTCÌýsaysÌýT-MobileÌýshould have realized that many of these premium text services were scams because of the high rate of customer complaints. In some cases, theÌýFTCÌýsays, as many as 40 percent of customers demanded refunds in a single month on certain services.

TheÌýFTCÌýsaid one way for consumers to try to prevent fraudulent charges is to ask their providers to block all third-party businesses from providing services on their phones.

T-MobileÌýdid not immediately respond to a request for comment.ÌýT-MobileÌýUS, Inc., is a publicly traded company. According to its website, Deutsche Telekom AG maintains a 67 percent ownership in the company's common stock.

Sprint Corp., the third-largest cellphone carrier, is in talks to buyÌýT-MobileÌýUS Inc., according to published reports. Analysts believe such a link-up would face stiff opposition from the same regulators who blocked AT&T from buyingÌýT-MobileÌýin 2011.

T-Mobile's stock fell 10 cents to $33.52 in afternoon trading.