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The Federal Trade Commission is accusing T-Mobile on Tuesday of throwing extra charges into customers' bills and pocketing millions, despite clear evidence that the charges were the result of scams.
The bogus charges were tacked onto SMS subscriptions services, supposedly providing customers with their horoscope or celebrity news. The charges were often a $9.99 monthly fee, with the carrier allegedly pocketing between 35 to 40 percent.
"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," Edith Ramirez, FTC chairwoman, said. "The FTC's goal is to ensure that T-Mobile repays all its customers for these crammed charges."
In a complaint, the FTC alleges that T-Mobile should have known the various "premium" services were scams as there were often up to a 40 percent refund rate every month.
The bogus charges would appear on the bill as a "premium" service, providing as little information as possible. The carrier would often note the crammed charges on the bill in a confusing manner, appearing as "8888906150BrnStorm23918."
Even when customers finally figured out where the charges were coming from and that they were fraudulent monthly charges, T-Mobile allegedly would often offer only partial refunds or none at all, claiming that the customer authorized the bogus charge.