FTC: T-Mobile made millions with bogus charges

Associated Press
T-Mobile Says 'Cheat on Your Provider' Offering Free iPhone 5s

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T-Mobile is offering a free iPhone 5s for a 7-day trial to lure new customers. The company says they want people to try the network and see for themselves if the reception works for them at home and work. T-Mobile CEO John Legere says "The way this industry forces Americans to buy wireless is completely, utterly broken." This is the latest attempt for the nation's number 4 carrier to gain market share. T-mobile is also offering free music for its customers by not charging music streaming to the data plan. Other moves by T-mobile includes agreeing to pay for early-termination fees for customers who switch from other carriers. The provider also eliminated wireless contracts and got rid of coverage fees. TheStreet's Susannah Lee reports from Wall Street.

The Federal Trade Commission is alleging that T-Mobile USA, Inc., made "hundreds of millions" of dollars off its customers through bogus charges.

In a complaint filed Tuesday, the FTC says the mobile phone provider billed consumers for subscriptions to "premium" texts 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 made aware that the subscriptions were scams.

FTC Chair Edith Ramirez said in a statement that the agency's goal is to ensure T-Mobile repays its customers. She said there were, quote, "clear warning signs the charges it was imposing were fraudulent."

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