FTC Says T-Mobile Made Hundreds of Millions From Bogus SMS Charges

An anonymous reader writes "Today the FTC filed a complaint (PDF) against T-Mobile USA, alleging the carrier made hundreds of millions of dollars from bogus charges placed on customers' bills for unauthorized SMS services. "The FTC alleges that T-Mobile received anywhere from 35 to 40 percent of the total amount charged to consumers for subscriptions for content such as flirting tips, horoscope information or celebrity gossip that typically cost $9.99 per month. According to the FTC's complaint, T-Mobile in some cases continued to bill its customers for these services offered by scammers years after becoming aware of signs that the charges were fraudulent." FTC chairwoman Edith Ramirez said, "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. 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." According to the complaint, T-Mobile also made it hard for customers to figure out they were being billed for these services, and failed to provide refunds when customers complained." Here's T-Mobile's response.

So...

[fuzzyfuzzyfungus]

I'm pretty sure that "T-Mobile USA, Inc." didn't actually do much of anything by itself, being a legal and accounting entity and all.

Any word on who actually directed, authorized, permitted, etc. this little plan, and why they aren't facing a raft of fraud charges?

Re:Deja vu

[fuzzyfuzzyfungus]

This similar to the case of Google profiting from illegal ads. Personally I think the complaint should be sent to questionable subscription service rather than shoot the messenger.

When the 'messenger' is the one who hides the charge and collects the proceeds of the fraud(taking a cut), you bloody well should shoot him. Then shoot whoever he was working with, of course; but no need to choose.

Aren't all SMS charges pretty much bogus?

[theodp]

These are outrageous, but even at 20 cents a text, it's gouging IMO.

Re:T-Mobile's Reponse

[Karma Sucks]

I'm going to go ahead and surmise that other carriers are behind this attack. What else explains the FTC not going after AT&T and Verizon for equally bad and worse stuff? T-Mobile has explicitly halted this practice.

Crystal ball...

[Charliemopps]

If I look into the future I see a press release about a year from now:

"In a clear victory for consumers, the FTC has levied a fine of $20 million against T-Mobile in response to fraudulent SMS charges. The largest fine (related to fraudulent SMS charges on a tuesday, during a leap year) ever."

then another year out

"T-modile announced that a former FTC director will now work as CEO of Regulatory affairs. T-Mobile released a statement saying that they are pleased to be working with someone with so many years working in government. The FTC director said in a statement "I really like me new boat!"

Re:T-Mobile's Reponse

[Intron]

Astroturf is on sale this week at Home Depot.