T-Mobile, FTC in settlement talks over phone charges
T-Mobile improperly profited from subscriptions to content such as celebrity gossip and horoscopes, the FTC said . Both sides asked for the lawsuit to be put on hold for 90 days while they work out a deal, according to papers filed Monday in Seattle federal court.
T-Mobile US is in talks to settle a Federal Trade Commission lawsuit claiming the Bellevue-based wireless carrier placed unauthorized third-party charges on customers’ phone bills.
T-Mobile improperly profited from subscriptions to content such as celebrity gossip and horoscopes, the FTC said in the July lawsuit. Both sides asked for the lawsuit to be put on hold for 90 days while they work out a deal, according to papers filed Monday in Seattle federal court.
“The parties are engaged in substantive settlement talks that they believe would resolve this matter and eliminate the need for further litigation,” lawyers for T-Mobile and the FTC said in the filing.
T-Mobile disregarded telltale signs of fraud while earning hundreds of millions of dollars from the third-party services, the FTC claimed. The company received as much as 40 percent of charges customers incurred for such content as horoscope information sent by text message, which typically costs $9.99 a month, the FTC said.
The FTC filed its complaint three weeks after T-Mobile announced a refund program through which it would notify current and former customers and establish a special website.
“Our top priority is doing what’s right for our customers,” Anne Marshall, a spokeswoman for T-Mobile, said in an emailed statement. “T-Mobile and the FTC jointly filed for a continuance as a matter of ordinary course. We are actively processing refunds through our proactive refund program.”
The Federal Communications Commission said in July that it was also investigating complaints about unauthorized billing at T-Mobile and was coordinating its probe with the FTC.
Mobile cramming is drawing more scrutiny. A survey commissioned by Vermont in early 2013 found 60 percent of third-party charges on the state’s mobile-phone bills weren’t authorized.
Attorneys general from states such as Texas have filed suits against content providers and their bill aggregators, the companies that serve as middlemen to mobile-phone carriers. The FTC has brought at least five actions related to wireless cramming, three in 2013, Jane Ricci, a staff attorney at the agency’s Bureau of Consumer Protection, said in July.