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

T-Mobile US Inc.

got 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. T-Mobile shares traded recently at $33.60, down 0.6 percent. Allegedly bogus charges were placed on mobile phone bills for "premium" services like flirting tips, horoscopes or celebrity gossip that typically cost $9.99 per month. Frequently the charges were 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.