News Column

FTC Sues T-Mobile, Alleges Bogus Billing

July 1, 2014

John Seward, Benzinga Lightning Feed

T-Mobile US (NYSE: TMUS) was slapped with a lawsuit Tuesday from the Federal Trade Commission, alleging it earned hundreds of millions of dollars by making bogus charges for spam messages.

Bogus charges were allegedly placed on mobile phone bills for "premium" services like flirting tips, horoscopes or celebrity gossip that typically cost $9.99 per month. The charges were frequently unauthorized by customers.

The lawsuit seeks disgorgement of allegedly ill-gotten gains along with customer refunds and an injunction banning T-Mobile from engaging in the practice, sometimes known as cramming.

The FTC alleges that T-Mobile received 35 percent to 40 percent of the total amount charged to consumers for such services.

T-Mobile was charging consumers for services that had refund rates of up to 40 percent in a single month, and the rate likely significantly understates the percentage of consumers affected, the FTC alleged.

T-Mobile shares traded recently at $33.40, down 0.65 percent.


Original headline: T-Mobile Sued By FTC For 'Hundreds Of Millions' In Bogus Charges

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