The Federal Trade Commission has launched a federal investigation and lawsuit against mobile phone provider T-Mobile US. The FCA has accused the company of charging customers for premium services from third-party companies, often bogus, and never authorised by its customers. The FTC also alleges that T-Mobile US took in millions of dollars as a result of the activity - hiding charges so that it was almost impossible for customers to complain.
T-Mobile said that many third-party vendors had acted irresponsibly. The FTC said the provider should have realised the services were scams due to the high level of customer complaints.
According to the FTC, T-Mobile US allegedly received as much as 40% of the total charged to its customers for subscriptions for content such as celebrity news and horoscopes. Some customers were charges for services that had refund rates up to 40% in one month, said the trade body.
FTC Chair Edith Ramirez said in a statement: ‘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. The FTC's goal is to ensure that T-Mobile repays all its customers for these crammed charges.’
In a company statement, T-Mobile said the allegations were unfounded and without merit.
Placing charges on a customer’s bill without prior authorisation is known as ‘cramming’. Consumers can take action to prevent such fraudulent charges by asking providers to block all third-party services on their mobile phones.