FTC: T-Mobile made millions in bogus charges

Updated: Tuesday, July 1 2014, 02:54 PM MDT
FTC: T-Mobile made millions in bogus charges  story image

By: ANNE FLAHERTY, Associated Press
WASHINGTON (AP) — T-Mobile USA knowingly made hundreds of millions of dollars off its customers in potentially bogus charges, a federal 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 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. 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."

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

The FTC said 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-Mobile did not immediately respond to a request for comment. Headquartered in Bellevue, Washington, T-Mobile US, 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 buy T-Mobile US Inc., according to published reports. Analysts believe such a link-up would face stiff opposition from the same regulators who blocked AT&T from buying T-Mobile in 2011.

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

FTC: T-Mobile made millions in bogus charges
comments powered by Disqus

El Paso Times Headlines

Towering sculpture at Sun Bowl Drive and Glory Road celebrates UTEP's history
The roundabout at Sun Bowl Drive and Glory Road at the University of Texas at El Paso is looking a lot more colorful as Seattle-based artist Koryn Rolstad is putting the finishing touches on her towering sculpture.
Watch videos of El Pasoans taking ALS Ice Bucket Challenge, submit yours
Have you taken part in the ALS Ice Bucket Challenge?
Cycling tour: 4th annual Oryx Challenge benefits USO El Paso
Marc Cattapan, the adaptive sports coordinator for the Warrior Transition Battalion at Fort Bliss, knows the psychological benefits of cycling.
Obama weighs broader move on legal immigration
WASHINGTON (AP) - President Barack Obama is considering key changes in the nation's immigration system requested by tech, industry and powerful interest groups, in a move that could blunt Republicans' election-year criticism of the president's go-it-alone approach to immigration.
Last 4 hostages freed in suburban Chicago standoff
HARVEY, Ill. (AP) - About two dozen heavily armed law enforcement officers stormed a home in Chicago's southern suburbs Wednesday to free four remaining hostages and capture two suspects, ending a 20-hour standoff that police say began as a robbery attempt.
Truck overturns at Trans Mountain and Rushing in Northeast El Paso
A truck has overturned on an underpass this afternoon in Northeast El Paso.
Texas Gov. Rick Perry formally enters not guilty plea
AUSTIN, Texas (AP) - Republican Texas Gov. Rick Perry has formally pleaded not guilty to criminal charges of leveraging his power to try to oust a Democratic district attorney convicted of drunken driving, according to court documents obtained Wednesday.
Las Cruces teenager struck by lightning breathing on his own
Officials in southern New Mexico say a 13-year-old middle school student who was critically injured by lighting during football practice is breathing on his own.
Dallas Cowboys worth more than $3 billion, tops in NFL
NEW YORK (AP) - The Dallas Cowboys are the first U.S. sports franchise to top $3 billion in value.
Emmys: Billy Crystal to pay tribute to Robin Williams
LOS ANGELES (AP) - Billy Crystal will pay tribute to Robin Williams, his longtime friend and fellow comedian, at next week's Emmy Awards.
Slain American journalist remembered as driven
ROCHESTER, N.H. (AP) - In 2011, just after he was released from the Libyan prison where he'd been held for six weeks, James Foley acknowledged the peril journalists face covering the world's most dangerous places, soberly conceding that a mistake could mean death.
Second El Paso man diagnosed with West Nile
A second El Paso man has been diagnosed with the West Nile virus this year as health officials warn residents of a new virus that has been found in the area.
US officials: Military mulling more troops to Iraq
WASHINGTON (AP) - U.S. officials say military planners are weighing the possibility of sending more American forces to Iraq mainly to provide additional security around Baghdad.
Northeast El Paso man cut with box cutter refuses to press charges
The victim of an aggravated assault in Northeast El Paso on Tuesday did not press charges against the man who allegedly cut him with a box cutter, police said today.
Pedestrian accident reported at Lee Trevino and Edgemere
The El Paso Police Department is responding to an accident at Edgemere Blvd. and Lee Trevino Drive in East El Paso.
advertisement
KFOX14 El Paso - Links Mentioned Get the latest web resources mentioned on KFOX14 News!
advertisement