The Federal Trade Commission is suing Bellevue-based T-mobile, claiming the cell phone service provider cashed in by hiding charges on customers bills.
In a complaint filed in Seattle, the FTC says the company knowingly charged customers for third-party premium services that T-Mobile knew were not authorized.
According to investigators, T-mobile was allegedly billing customers for premium SMS services offered by scammers, such as text horoscopes and text chats, even though they knew the charges were fraudulent.
"T-Mobile continued to charge even after there were all kinds of red flags that began to pop up, that should have warned them that there were problems," said FTC Regional Director Charles Harwood.
The FTC says T-Mobile knew it had a very high volume of complaints, not to mention an extremely high rate of refunds to consumers because of the cramming problem and industry audits about the third party cramming problem.
"T-Mobile, even when consumers called them, made it hard for consumers to get their money back. In some cases they would only offer consumers two months of refunds, even though the consumers had been charged for multiple months of refunds without realizing it," Harwood said.
In a published response, T-mobile's CEO John Legere said, "We have seen the complaint filed today by the FTC and find it to be unfounded and without merit. In fact T-Mobile stopped billing for these Premium SMS services last year and launched a proactive program to provide full refunds for any customer that feels that they were charged for something they did not want."
Legere says T-Mobile believes the third party providers who acted fraudulently should be held accountable, and the lawsuit seeking to hold T-Mobile responsible is factually and legally unfounded as well as misdirected.
On June 10, T-Mobile announced a new refund program related to the premium SMS charges. The company says from July to September it will be reaching out to customers who were billed for the third party services and give them the opportunity to request refunds.