FTC Alleges T-Mobile Charged Customers for Unauthorized, Fraudulent Services

by Istvan Fekete on July 2, 2014

The United States Federal Trade Commission today filed a complaint against T-Mobile, alleging that the wireless player has charged customers for unauthorized so-called “premium” SMS subscriptions such as flirting tips, horoscope information, and celebrity gossip, which typically cost $10 a month.

According to charges filed by the FTC, T-Mobile received about 35% to 40% of the total amount charged to consumers for the aforementioned premium subscriptions. The carrier — in some cases — continued to bill its customers for these services offered by scammers years after it was clear that the charges were fraudulent. As the FTC document emphasizes, the carrier made “hundreds of millions of dollars” from such fraudulent charges.

The catch is, T-Mobile was aware of the nature of such charges, the FTC claims, because it was charging customers for services that had a refund rate of up to 40% in a single month. So, if so many people were seeking refunds, the FTC document says, this is an obvious sign that the charges were never authorized by customers. The complaint filed by the FTC also claims that an internal document shows that T-Mobile received a large number of complaints from its customers back in 2012.

T-Mobile also failed to refund customers after they had discovered the charges, although the carrier did everything possible to hide them by issuing lengthy bills. As a result, the FTC is now asking for a court order to prevent T-Mobile from billing its customers for services they don’t want and to provide full refunds for its “ill-gotten gains.”

“After looking past a “Summary” section as well as an “Account Service Detail” section, both of which described “Usage Charges” but did not itemize those charges, a consumer might then reach the section labeled “Premium Services,” where the crammed items would be listed. According to the complaint, the information would be listed there in an abbreviated form, such as “8888906150BrnStorm23918,” that did not explain that the charge was for a recurring third-party subscription supposedly authorized by the consumer.”

In recent months, T-Mobile has made headlines with its un-carrier approach as it tries to distance itself from other wireless players and disrupt traditional mobile service. Also, we’ve seen the company break up with BlackBerry, as the majority of BlackBerry users have switched to the iPhone as a result of a T-Mobile promo.

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Written by: Istvan Fekete. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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