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The Federal Trade Commission is accusing T-Mobile of overbilling customers to collect hundreds of millions in bogus fees, according to a lawsuit filed Tuesday (July 1). The FTC claims the mobile phone giant continued tacking on extra charges even after customers opted out.

T-Mobile hid the charges behind “premium” text messages — disguised as horoscopes, jokes, flirting tips, and other messages — that run customers close to $10 per month. The company pocketed 35% to 4o% percent of the profits, the FTF said. “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,” noted FTC Chairwoman Edith Ramirez. “The FTC’s goal is to ensure that T-Mobile repays all its customers for these crammed charges.”

For their part, T-Mobile called the accusations are “unfounded and without merit” and claims to have stopped billing customers hidden fees.

“T-Mobile stopped billing for these Premium SMS service last year and launched a proactive program to provide full refunds for any customer that feel that they were charged for something they do not want,” said T-Mobile CEO John Legere. “T-Mobile is fighting harder than any of the carriers to change the way the wireless industry operated 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.”

The FTC says it tried to settle with T-Mobile out of court but could not come to an agreement.


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