T-Mobile is being accused of "cramming" its customers with charges from third-party SMS text message vendors without the customers being aware of the activity.
Federal regulators received complaints from T-Mobile customers who said they never authorized charges on their account for services like celebrity gossip, flirting advice, horoscopes and other messages.
Allegations made by the Federal Trade Commission describe a scenario in which the carrier knew about the charges that were applied to the accounts, sometimes authorized by deceptive practices, and made profits from the charges.
The FTC is urging customers to review bills to determine if they were overcharged.
T-Mobile makes a commission from SMS text message services, reportedly about 30 percent to 40 percent of the sales on these transactions that amount to about $10 per month for each customer served.
The FTC said T-Mobile had added "hundreds of millions" of dollars onto unsuspecting mobile phone service account holders. In district court, the FTC alleged that T-Mobile knowingly participated in, or did nothing to stop, the activity on these accounts from the period of 2009 until almost 2014. They also alleged that deceptive advertising allowed the unauthorized transactions to appear as though the customer wasn't being charged when indeed they were.
T-Mobile claimed the charges are unwarranted and that the company has made all of the attempts possible to refund customers if they feel they were overcharged. But regulators said that even after customers reportedly opted out of services, they were still charged.
"We have alleged that T-Mobile took a hefty cut out of these charges," said Jessica Rich, FTC director of consumer protection.
The FTC claims that the company ignored the complaints it received about the charges to customers to make profit. T-Mobile CEO John Legere pointed to the actions of the third-party vendors, saying that the industry faces challenges dealing with irresponsible vendors. The company has vowed to stop charging premium SMS fees, but it must repay customers who were charged before being fully compliant.
The Federal Communications Commission (FCC) has also joined the investigation into the cramming scandal. The FCC said it will coordinate with the other federal agency until there is a resolution to the matter involving T-Mobile.
T-Mobile said in a statement it was disappointed with the decision and referred to itself as the most pro-consumer wireless carrier in the market, saying it worked the hardest to reduce fraud in the industry.
