FTC charges T-Mobile with ‘cramming’ customers’ bills
Monday, July 07, 2014
The FTC last week charged cellular phone service provider T-Mobile with making hundreds of millions of dollars by allowing unauthorized charges for third-party SMS (text message) subscriptions for things like horoscopes and celebrity gossip to be placed on its customers’ bills—a practice known as cramming. The company allegedly kept 35-40 percent of the subscription fees of typically $1.99 to $9.99 per month, and made it difficult for customers to detect the bogus charges or to receive full refunds when they complained. According to the complaint, T-Mobile was well aware that the charges were fraudulent, yet allowed them to continue.
The FTC seeks to have T-Mobile reimburse its customers for all the crammed charges and to permanently prevent the company from engaging in such practices in the future.
Read more about the FTC’s complaint against T-Mobile.
The Federal Communications Commission (FCC) estimates that as many as 20 million consumers are crammed every year, with only one in 20 spotting the scam. Last year, Consumer Action and coalition advocates urged the FCC to take regulatory action to better protect consumers from cramming. In the meantime, it’s up to consumers to be proactive about detecting and stopping bogus phone charges.
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