T-Mobile has been accused of giving customers a little too much of something they don’t want: Extra charges. The Federal Trade Commission stated on Tuesday that it will be suing T-Mobile for ‘cramming’ customer bills with unapproved charges.
According to the New York Times, customers were hit with charges, usually around $9.99, for premium texting services that the customers never asked for or approved.T-Mobile would allow the third-party charge (for services like horoscopes, dating advice or similar services) and T-Mobile would take about 35-40 percent of the charge into its own pocket. The FTC says the practice has been going on since 2009.
Unauthorized billing, or cramming, is an older practice, and the FTC has been fighting against cramming especially with landline bills However, mobile cramming is something that has come to a head in recent years. The Wire reports that this is the fifth mobile cramming action that’s been taken.
The FTC believes that hundreds of millions of dollars have gone into the pockets of T-Mobile through this practice and that millions of customers have been affected. Their report alleged that even when customers were aware of the charges on their bill, when they asked for a refund, they would only refund 1 month or only a portion of the total charge.
The FTC says that phone company ignored the signs of fraud and have caused harm to their customers. T-Mobile’s chief executive, John Legere, says that the claims are meritless and misdirected.
The Federal Communications Commision has also launched an investigation against T-Mobile. The New York Times notes that this could potentially be very bad for T-Mobile, since the company is currently in talks with Sprint about a merger, which would need to be approved by the FCC. Should things go poorly with this investigation, T-Mobile can kiss that deal goodbye.
The FTC is urging all consumers to check their bills for fraudulent charges. The commission is seeking refunds for customers, though the dollar amount isn’t specified, and they are seeking to prevent t-mobile from ever being able to ‘cram’ bills again. If the FCC should decide to do so, a fine could also placed against the company