In a complaint filed Tuesday, the Federal Trade Commission charged mobile phone service provider T-Mobile USA with making “hundreds of millions of dollars” by placing charges on mobile phone bills for purported “premium” SMS subscriptions that, in many cases, were allegedly “bogus charges that were never authorized by its customers.”
The FTC alleges that T-Mobile received anywhere from 35 to 40 percent of the total amount charged to consumers for subscriptions for content such as flirting tips, horoscope information or celebrity gossip that typically cost $9.99 per month.
T-Mobile in some cases continued to bill its customers for these services offered by scammers years after becoming aware of signs that the charges were fraudulent, a provided statement from the FTC reads.
T-Mobile is denying any wrongdoing.
“We have seen the complaint filed today by the FTC and find it to be unfounded and without merit,” says John Legere, CEO of T-Mobile USA. “In fact T-Mobile stopped billing for these Premium SMS services last year and launched a proactive program to provide full refunds for any customer that feels that they were charged for something they did not want. T-Mobile is fighting harder than any of the carriers to change the way the wireless industry operates and we are disappointed that the FTC has chosen to file this action against the most pro-consumer company in the industry rather than the real bad actors.”
The FTC’s complaint alleges that in some cases, T-Mobile was charging consumers for services that had refund rates of up to 40 percent in a single month.
“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 Chairwoman Edith Ramirez. “The FTC’s goal is to ensure that T-Mobile repays all its customers for these crammed charges.”
“This is about doing what is right for consumers and we put in place procedures to protect our customers from unauthorized charges,” Legere counters. “Unfortunately, not all of these third party providers acted responsibly—an issue the entire industry faced. We believe those providers should be held accountable, and the FTC’s lawsuit seeking to hold T-Mobile responsible for their acts is not only factually and legally unfounded, but also misdirected.”