The Federal Trade Commission is going after mobile carrier T-Mobile, accusing the company of shady business practices in which they made "hundreds of millions of dollars" off their customers with fraudulent charges. (Via Flickr / Adam Fagen, Mike Mozart)
The FTC filed the complaint Tuesday saying T-Mobile charged customers as much as $9.99 per month for services like "flirting tips, horoscope information or celebrity gossip." Seriously.
T-Mobile allegedly participated in something called "third-party billing" and "cramming." The FTC explains the former as when a mobile carrier charges you for services offered by another company. It becomes "cramming" when those charges are placed on a customer's bill without them knowing.
Here's an example of how they did it: The FTC says the charges were hidden and not clearly described on users' bills. When the charges do show up, they appear as a random assortment of letters and numbers.
The government agency says T-Mobile received 35-40 percent for those charges between 2009 and 2013.
Also, up to 40 percent of consumers charged asked for refunds. The FTC said in a statement that "was an obvious sign to T-Mobile that the charges were never authorized by its customers."
But T-Mobile CEO John Legere called the accusations "unfounded and without merit," saying the company stopped "cramming" last year and also started a program to refund customers who were unsatisfied.
Legere said in a statement, "T-Mobile is fighting harder than any of the carriers to change the way the wireless industry operates and we are disappointed that the FTC has chosen to file this action against the most pro-consumer company in the industry rather than the real bad actors."
This lawsuit comes as T-Mobile is reportedly inching closer to a $32 billion merger with Sprint, which would make them comparable in size to Verizon and AT&T — the two largest telecom companies.
According to CNN, the FTC doesn't know the exact number of people affected by the fraudulent charges, but the agency hopes to secure refunds for all of those customers.