FTC Says T-Mobile Profits From Cramming
SEATTLE (CN) - T-Mobile USA allows third-party crammers to charge its customers for "services" they didn't order and don't want, and T-Mobile keeps a kickback, the FTC claims in Federal Court.
In the complaint, filed Tuesday, the FTC claims the T-Mobile has made "hundreds of millions of dollars" from cramming.
The complaint states: "In numerous instances, defendant has charged consumers for third-party subscriptions that the consumers did not order or authorize, a practice known as cramming. Defendant has continued to charge consumers for third-party subscriptions even after large numbers of consumers complained about unauthorized charges. Refund rates for the subscriptions were high - in some cases as high as 40 percent. Further, defendant has continued to charge consumers for third-party subscriptions even after industry auditor alerts, law enforcement and other legal actions, and news articles indicated that the third-party merchants were not obtaining valid authorization from consumers for the charges.
"Defendant has retained a portion of each charge for third-party subscriptions paid by consumers, typically at least 35 percent of the charge and in some cases as high as 40 percent. Defendant has retained a larger cut from subscriptions that generate a large percentage of refunds. Defendant has earned hundreds of millions of dollars from third-party subscriptions. T-Mobile's practices have caused consumers millions of dollars of injury."
The FTC seeks disgorgement, restitution, an injunction and damages for deceptive trade and unfair billing practices.