T-Mobile accused of making money off bogus billing - 7News Boston WHDH-TV

T-Mobile accused of making money off bogus billing

Posted: Updated:
WASHINGTON (AP) - Federal regulators are urging consumers to go through their phone bills line by line after they accused T-Mobile US of wrongly charging customers for premium services, like horoscope texts and quirky ringtones, the customers never authorized.

The Federal Trade Commission announced Tuesday that it is suing T-Mobile in a federal court in Seattle with the goal of making sure every unfairly charged customer sees a full refund. The lawsuit, the first of its kind against a mobile provider, is the result of months of stalled negotiations with T-Mobile, which says it is already offering refunds.

"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," FTC Chair Edith Ramirez in a statement.

The practice is called "cramming": A third party stuffs a customer's bill with bogus charges such as $10-per-month horoscopes or updates on celebrity gossip. In this case, the FTC said, T-Mobile was working with third-party vendors being investigated by regulators and known to be the subject of numerous customer complaints. T-Mobile then made it difficult for customers to notice the added charge to their bill and pocketed up to 40 percent of the total, according to the FTC.

In a statement, T-Mobile called the allegations "unfounded and without merit" and said it blames the third-party vendors for the erroneous charges. T-Mobile also said it is already reaching out to customers to provide refunds.

The Federal Communications Commission says it has launched a separate inquiry into allegations that T-Mobile potentially made hundreds of millions of dollars in fraudulent charges.

"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," said John Legere, the company's CEO, in a statement.

The FTC told reporters in a conference call Tuesday that it had been in negotiations with T-Mobile for months in an attempt to guarantee refunds would be provided to customers but that the two sides couldn't reach an agreement.

T-Mobile appears to have been laying the groundwork to head off the federal complaint. Last November, the company announced that it would no longer allow premium text services because they were waning in popularity and not all vendors had acted responsibly. In June, it announced it would reach out to consumers to provide refunds. But the FTC says that in many cases, the refunds are only partial and T-Mobile often refers customer complaints to the third-party vendors.

The FTC said consumers can file a complaint with the FTC if they believe they were victimized. They can also prevent fraudulent charges in the first place by asking their providers to block all third-party businesses from providing services on their phones.

Headquartered in Bellevue, Washington, T-Mobile US Inc. is a publicly traded company. T-Mobile's stock fell 21 cents to close Tuesday at $33.41.

  • U.S. & World NewsMore>>

  • 10 Things to Know for Tuesday

    10 Things to Know for Tuesday

    Monday, September 1 2014 9:10 PM EDT2014-09-02 01:10:58 GMT
    By The Associated Press Your daily look at late-breaking news, upcoming events and the stories that will be talked about Tuesday:[more]
    By The Associated Press Your daily look at late-breaking news, upcoming events and the stories that will be talked about Tuesday:[more]
  • Americans detained in North Korea call for US help

    Americans detained in North Korea call for US help

    Monday, September 1 2014 6:03 PM EDT2014-09-01 22:03:47 GMT
    North Korea has given foreign media access to three detained Americans who said they have been able to contact their families and - watched by officials as they spoke - called for Washington to send a...[more]
    North Korea gave foreign media access on Monday to three detained Americans who said they have been able to contact their families and - watched by officials as they spoke - called for Washington to send a high-ranking...[more]
  • Obama: 'Revving' economy calls for higher wages

    Obama: 'Revving' economy calls for higher wages

    Monday, September 1 2014 5:03 PM EDT2014-09-01 21:03:45 GMT
    President Barack Obama is sounding more bullish these days about the nation's recovery from the Great Recession. And the White House is encouraging Democrats to show similar optimism as they head into the...[more]
    President Barack Obama renewed his push for Congress to raise the minimum wage Monday in a buoyant accounting of the economy's "revving" performance, delivered on behalf of Democrats opening their fall campaigns for...[more]
  • Stay Connected

  • Like Us on Facebook
  • Follow Us on Twitter
Powered by WorldNow

WHDH TV 7NBC WLVI TV CW56
Sunbeam Television Corp
7 Bulfinch Place
Boston, MA 02114

News Tips: (800) 280-TIPS
Tell Hank: (855) 247-HANK
Corporate Media Services: (800) 642-1551

Can't find something?
Connect with us here:
Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and WHDH. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service.