FTC: T-Mobile made millions in bogus charges

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FTC: T-Mobile made millions in bogus charges
T-Mobile CEO John Legere speaks during a news conference Tuesday, March 26, 2013 in New York. T-Mobile will start offering the iPhone 5 on April 12, filling what Legere said was "a huge void" in its phone lineup. The company is currently the only major U.S. carrier not to offer Apple's popular smartphone. (AP Photo/Mary Altaffer)
A T-Mobile US Inc. employee transfers data to a customer's new phone at a retail store in Torrance, California, U.S., on Monday, Nov. 4, 2013. T-Mobile US Inc. is scheduled to release earnings on Nov. 4. Photographer: Patrick T. Fallon/Bloomberg via Getty Images
IMAGE DISTRIBUTED FOR T-MOBILE - T-Mobile President and CEO John Legere (L) and Chief Marketing Officer Mike Sievert (R) respond to questions via Twitter during the T-Mobile US Q3 Earnings call on Tuesday, Oct. 28, 2014 in Half Moon Bay, Calif. Today, T-Mobile announced the biggest growth quarter in the company's history. (Josh Edelson/AP Images for T-Mobile)
FILE - This Sept. 12, 2012 file photo shows a man using a cellphone as he passes a T-Mobile store in New York. T-Mobile USA knowingly made hundreds of millions off its customers in bogus charges, a federal regulator alleged Tuesday in a complaint that is likely to damage the reputation of a household name in wireless communications. In its complaint filed in federal court, the Federal Trade Commission claimed that T-Mobile billed consumers for subscriptions to premium text services such as $10-per-month horoscopes that were never authorized by the account holder. The FTC alleges that T-Mobile collected as much as 40 percent of the charges, even after being alerted by other customers that the subscriptions were scams. (AP Photo/Mark Lennihan, File)
A sign for a T-Mobile store is displayed, Wednesday, Nov. 9, 2011, in New York. T-Mobile is a subsidiary of Deutsche Telekom. New plans at T-Mobile USA helped the struggling No. 4 carrier stabilize its business in the third quarter after dismal results earlier this year. (AP Photo/Mark Lennihan)
IMAGE DISTRIBUTED FOR T-MOBILE - T-Mobile CEO John Legere, right, is interviewed by Yahoo! tech columnist, David Pogue, for the Un-carrier 8.0 Data Stash announcement, Tuesday, Dec. 16, 2014, in New York. T-Mobile announced its next Un-carrier move – enabling its customers to roll unused, high-speed data into a personal Data Stash each month automatically. (John Minchillo/AP Images for T-Mobile)
IMAGE DISTRIBUTED FOR T-MOBILE - (from left to right) Chief Financial Officer Braxton Carter, President and CEO John Legere, Chief Marketing Officer Mike Sievert, and Chief Technology Officer Neville Ray are seen during the T-Mobile US Q3 Earnings call on Tuesday, Oct. 28, 2014 in Half Moon Bay, Calif. Today, T-Mobile announced the biggest growth quarter in the company's history. (Josh Edelson/AP Images for T-Mobile)
A man uses a cell phone while walking past a T-Mobile US Inc. retail store in Redondo Beach, California, U.S., on Sunday, Nov. 3, 2013. T-Mobile US Inc. is scheduled to release earnings on Nov. 4. Photographer: Patrick T. Fallon/Bloomberg via Getty Images
NEW YORK, NY - APRIL 12: Apple's iPhone 5 is advertised in the window of a Manhattan T-Mobile store on April 12, 2013 in New York City. Following years of waiting to sell the phone, T-Mobile will begin supporting and selling the iPhone 5 on its network starting on Friday. (Photo by Spencer Platt/Getty Images)
NEW YORK, NY - MARCH 23: A T-Mobile store is seen at 7th Avenue and 49th Street on March 23, 2012 in New York City. T-Mobile USA announced they would be eliminating 1,900 call-center jobs in an effort to cut costs. (Photo by Andrew Burton/Getty Images)
FILE-In this Wednesday, Sept. 12, 2012, file photo man using a cellphone passes a T-Mobile store, Wednesday, Sept. 12, 2012 in New York. Struggling cellphone companies T-Mobile USA and MetroPCS Communications are set to merge, in a deal that will create an operator with more than 40 million subscribers. In a joint statement, the two companies said Wednesday, Oct. 3, 2012, that Deutsche Telekom AG, the owner of T-Mobile USA, will hold 74 percent of the new business, while MetroPCS's shareholders will hold the remainder, as well as receiving a payment of about $1.5 billion. (AP Photo/Mark Lennihan, File)
NEW YORK CITY - APRIL 19: Pedestrians walk past a retail outlet for T-Mobile in New York City, on Friday, April 19, 2013.
BERLIN - JULY 24: Emblem T-Mobile. T-Mobile International AG is a holding company for Deutsche Telekom AG's various mobile communications subsidiaries outside Germany, July 24, 2013, Berlin, Germany
A T-Mobile retail store.
IMAGE DISTRIBUTED FOR T-MOBILE - T-Mobile executives, John Legere, center, Neville Ray, right, and Mike Sievert, left, host a media briefing announcing Un-carrier 8.0 Data Stash, Tuesday, Dec 16, 2014, in New York. T-Mobile announced its next Un-carrier move – enabling its customers to roll unused, high-speed data into a personal Data Stash each month automatically. (John Minchillo/AP Images for T-Mobile)
T-Mobile CEO John Legere speaks at a T-Mobile announcement in San Francisco, Wednesday, Sept. 10, 2014. T-Mobile will sell more than 100 smartphone models with a built-in feature that taps into Wi-Fi networks to make phone calls and send texts when customers can't connect to the wireless carrier's cellular network. (AP Photo/Jeff Chiu)
T-Mobile CEO John Legere speaks at a T-Mobile announcement in San Francisco, Wednesday, Sept. 10, 2014. T-Mobile will sell more than 100 smartphone models with a built-in feature that taps into Wi-Fi networks to make phone calls and send texts when customers can't connect to the wireless carrier's cellular network. (AP Photo/Jeff Chiu)
IMAGE DISTRIBUTED FOR TMO - T-Mobile CTO Neville Ray addresses the media at the Un-carrier 7.0 event on Wednesday, Sept. 10, 2014, in San Francisco. T-Mobile unleashed Wi-Fi, letting customers of the Un-carrier transform all Wi-Fi locations into extensions of T-Mobile's network. (Jed Jacobsohn/ AP Images for TMO)
FILE - An Oct. 19, 2012, file photo is of a T-Mobile store in New York. The Federal Trad Commission Tuesday July 1, 2014, is alleging that T-Mobile USA, Inc., made "hundreds of millions" of dollars off its customers through bogus charges. . (AP Photo/Mark Lennihan, file)
T-Mobile Chief Technology Officer Neville Ray speaks at a T-Mobile announcement in San Francisco, Wednesday, Sept. 10, 2014. T-Mobile will sell more than 100 smartphone models with a built-in feature that taps into Wi-Fi networks to make phone calls and send texts when customers can't connect to the wireless carrier's cellular network. (AP Photo/Jeff Chiu)
T-Mobile CEO John Legere, left, hands an iPhone 5S to Chief Marketing Officer Mike Sievert, right, at T-Mobile's Uncarrier 5.0 event, Wednesday, June 18, 2014, in Seattle. (AP Photo/Ted S. Warren)
T-Mobile CEO John Legere speaks at T-Mobile's Uncarrier 5.0 event, Wednesday, June 18, 2014, in Seattle. (AP Photo/Ted S. Warren)
T-Mobile employees are bathed in pink light as they cheer during a speech by CEO John Legere at T-Mobile's "Un-carrier" event, Wednesday, June 18, 2014, in Seattle. (AP Photo/Ted S. Warren)
T-Mobile CEO John Legere speaks in front of a chart showing the relation of traditional fixed phone lines vs mobile phone lines at T-Mobile's Uncarrier 5.0 event, Wednesday, June 18, 2014, in Seattle. (AP Photo/Ted S. Warren)
FILE - In this May 7, 2009, file photo the logo of Deutsche Telekom is pictured at the headquarters of the telecommunication company in Bonn, Germany. Telekom said Thursday, Nov. 7, 2013, it made a net profit of 588 million euros (US dollar 793 million) in the third quarter as it continued to add customers at T-Mobile USA. The company’s bottom line rebounded after a loss of 7 billion euros in the same quarter a year ago due to non-cash accounting charges related to the merger of its U.S. business with Dallas-based MetroPCS Communications. (AP Photo/Hermann J. Knippertz, File)
IMAGE DISTRIBUTED FOR T-MOBILE - T-Mobile CEO John Legere, right, and T-Mobile Chief Marketing Officer Mike Sievert check out a tablet before the 'Tablets Un-leashed' Twitter conference, on Wednesday, Oct. 23, 2013 in Bellevue, Wash. T-Mobile announced a revolutionary approach to make tablets, just as mobile and connected as smartphones, by offering customers 200MB of free high speed data every month for the life of their device. (Stephen Brashear / AP Images for T-Mobile)
T-Mobile CEO John Legere is interviewed on the floor of the New York Stock Exchange Thursday, Oct. 10, 2013. (AP Photo/Richard Drew)
IMAGE DISTRIBUTED FOR T MOBILE - T-Mobile CEO John Legere introduces JUMP!, the company's new revolutionary device upgrade program during T-Mobile's Un-carrier event at Skyline Studios, Wednesday, July 10, 2013, in New York. Beginning Sunday, July 14, customers can choose to upgrade when they want, not when they are told. (John Minchillo/AP Images for T Mobile)
IN THIS IMAGE DISTRIBUTED BY AP IMAGES FOR T-MOBILE - T-Mobile CEO John Legere celebrates the end of international data roaming fees at a special event for customers with Shakira in New York's Bryant Park on Wednesday, Oct. 9, 2013. T-Mobile has extended unlimited data and texting to Simple Choice customers traveling in more than 100 countries. (Jason DeCrow/AP Images for T-Mobile)
T-Mobile CEO John Legere raises his hand during opening bell ceremonies to celebrate the combined T-Mobile USA, Inc. and MetroPCS Communications companies trading, at the New York Stock Exchange, Wednesday, May 1, 2013. (AP Photo/Richard Drew)
In this Feb. 25, 2011 file photo, a T-Mobile store is shown in Palo Alto, Calif. The parent company of T-Mobile USA says it is merging its cell phone business with MetroPCS Communications. Deutsche Telekom AG says its board of directors and the supervisory board have approved the merger Wednesday, Oct. 3, 2012. It says the board of MetroPCS has also accepted the deal. It says Deutsche Telekom will hold 74 percent of the new business. MetroPCS's shareholders will have the remaining stake and receive a payment of about US dollar 1.5 billion. (AP Photo/Paul Sakuma)
T-Mobile CEO John Legere speaks during a news conference Tuesday, March 26, 2013 in New York. T-Mobile will start offering the iPhone 5 on April 12, filling what Legere said was "a huge void" in its phone lineup. The company is currently the only major U.S. carrier not to offer Apple's popular smartphone. (AP Photo/Mary Altaffer)
John Legere, chief executive officer of T-Mobile US Inc., pauses during a Bloomberg Television interview in New York, U.S., on Tuesday, Dec. 16, 2014. T-Mobile US Inc. is allowing customers to roll over high-speed data allotments, in the fourth-largest U.S. wireless carrier's latest marketing push to lure subscribers from Verizon Communications Inc. and AT&T Inc. Photographer: Scott Eells/Bloomberg via Getty Images
T-Mobile US Inc. signage is displayed in the window of a retail store in Washington, D.C., U.S., on Thursday, Oct. 23, 2014. T-Mobile US Inc. is expected to release third quarter earnings figures on Oct. 27. Photographer: Andrew Harrer/Bloomberg via Getty Images
T-Mobile CEO John Legere speaks at T-Mobile's Uncarrier 5.0 event, Wednesday, June 18, 2014, in Seattle. (AP Photo/Ted S. Warren)
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WASHINGTON (AP) - T-Mobile USA knowingly made hundreds of millions of dollars off its customers in potentially bogus charges, a federal regulator alleged Tuesday in a complaint likely to mar the reputation of a household name in wireless communications.

In its complaint filed in a federal court in Seattle, the Federal Trade Commission claimed that T-Mobile billed consumers for subscriptions to premium text services such as $10-per-month horoscopes that were never authorized by the account holder. The FTC alleges that T-Mobile collected as much as 40 percent of the charges, even after being alerted by other customers that the subscriptions were scams.

"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," said FTC Chair Edith Ramirez in a statement. "The FTC's goal is to ensure that T-Mobile repays all its customers for these crammed charges."

The Federal Communications Commission has launched a separate inquiry into T-Mobile's billing practices, which could result in fines if it finds any wrongdoing.

The practice is often referred to as "cramming": businesses stuff a customer's bill with bogus charges associated with a third party. In this case, the FTC says T-Mobile should have realized that many of these premium text services were scams because of the high rate of customer complaints. In some cases, the FTC says, as many as 40 percent of customers demanded refunds in a single month on certain services.

The FTC said one way for consumers to try to prevent fraudulent charges is to ask their providers to block all third-party businesses from providing services on their phones.

T-Mobile did not immediately respond to a request for comment. Headquartered in Bellevue, Washington, T-Mobile US, Inc., is a publicly traded company. According to its website, Deutsche Telekom AG maintains a 67 percent ownership in the company's common stock.

Sprint Corp., the third-largest cellphone carrier, is in talks to buy T-Mobile US Inc., according to published reports. Analysts believe such a link-up would face stiff opposition from the same regulators who blocked AT&T from buying T-Mobile in 2011.

T-Mobile's stock fell 10 cents to $33.52 in afternoon trading.

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