FTC files complaint against T-Mobile for charging customers for fraudulent services [Update]

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On July 1, the United States Federal Trade Commission (FTC) filed a complaint against T-Mobile that suggest the Magenta network knowingly charged its subscribers for fraudulent premium services.

Officially filed as of 2:45PM E.S.T., the FTC has made complaints against T-Mobile alleging the carrier has knowingly charged customers for unauthorized SMS subscriptions, which sent information to people’s phones that included horoscopes, and celebrity gossip, that charged those subscribers $9.99 per month. The report claims that T-Mobile collected between 30 and forty percent of the amount charged to customers, continuing to bill the subscribers even after the charges were found to be fraudulent.

The FTC says that T-Mobile made “hundreds of millions” of dollars from these tactics.

According to the filing, the FTC’s justification for the complaint comes from the massive amounts of T-Mobile subscribers seeking refunds from these premium subscription services. The wireless carrier has apparently received quite a few complaints and refund requests since 2012. Moreover, the FTC claims that T-Mobile made it difficult for consumers to locate the premium charges on their bills, as the “summary” section of their bills did not include a third-party charge or a subscription that was recurring every month.

From the filing:

After looking past a “Summary” section as well as an “Account Service Detail” section, both of which described “Usage Charges” but did not itemize those charges, a consumer might then reach the section labeled “Premium Services,” where the crammed items would be listed.

According to the complaint, the information would be listed there in an abbreviated form, such as “8888906150BrnStorm23918,” that did not explain that the charge was for a recurring third-party subscription supposedly authorized by the consumer.

If that wasn’t enough, the report also claims that T-Mobile failed to provide full refunds to those who discovered the charges. As a result, the FTC is looking for a court to order that T-Mobile can no longer charge consumers for fraudulent charges, and to provide full refunds. As of this writing, T-Mobile has not responded to the complaint. This filing comes on the heels of two of the Magenta network’s Uncarrier initiatives, one of which saw the implementation of their Test Drive feature, and their reveal of unlimited data for music streaming services.

Update: T-Mobile’s CEO, John Legere, has made an official statement regarding the FTC’s filing. As you can imagine, he doesn’t agree with it, and believes it is “factually and legally unfounded, but also misdirected.” You can read the full official statement here.

[via FTC]

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