T-Mobile US is under federal investigation and is being sued for fraudulently billing hundreds of millions of dollars from its customers. Just as the mobile carrier was making gains in the wireless phone industry by offering competitive, flexible phone plans and contract buyouts, the Federal Trade Commission (FTC) is alleging the company scammed its customers.
The complaint claims T-Mobile billed consumers for subscriptions to premium text services, such as $10-per-month horoscopes or entertainment gossip updates, 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. The company, whose headquarters is in Bellevue, Wash., argued against the claim, calling it “unfounded and without merit.”
The FTC also alleges that T-Mobile often hid the charges, making it almost impossible for customers to protest. Investigators estimate T-Mobile kept as much as 40 percent of the bogus charges, resulting in hundreds of millions of dollars in profit.
On a conference call on Tuesday, the FTC told reporters they had been in negotiations with the company for months to guarantee refunds to customers, but couldn’t reach an agreement.
If the allegations are proven true, T-Mobile will face heavy fines from the FTC.
To protect yourself from fraudulent cell phone charges, the FTC recommends asking your phone carrier to block all third party businesses from accessing your devices.