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The ‘un-carrier’ under fire over the cellphone industry’s uncomfortable truth

A federal lawsuit accusing T-Mobile of profiting off a scam called “cramming” shines a spotlight on an uncomfortable truth in the cellphone industry: Wireless companies can make lots of money off of so-called third-party charges–even when they’re fraudulent.

Cramming is when third-party companies throw charges on your bill for services you didn’t authorize. Often these are “premium texting services,” such as horoscopes for up to $9.99 a month. (The horoscope service can make at least one accurate prediction: Higher bills!) Consumer advocates say “cramming” costs victims up to $887 million a year.

On Tuesday, the Federal Trade Commission (FTC) filed a federal lawsuit accusing T-Mobile, the self-proclaimed “un-carrier,”  of essentially turning a blind eye to the scam and raking in hundreds of millions of dollars from these fraudulent third-party fees. (See CUB talk about it on Fox Chicago.)

Regulators estimate that T-Mobile kept as much as 40 percent of the bogus charges. CUB has long called upon the phone industry to do more to combat cramming. The fact that companies can get a cut of the money raises questions about their motivation to really tackle this problem.

In-your-face T-Mobile CEO  John Legere called the lawsuit “without merit,” and wondered why the FTC would pick on his “most pro-consumer company” and not “the real bad actors.” As usual, there’s another side to that story: The FTC says it had tried for months to negotiate with T-Mobile to secure refunds for cramming victims, without success.

CUB and Validas have warned Illinois that cramming is a growing problem in Illinois. So scan your bills for suspicious charges and follow these tips:

*Register your cellphone number with the Do Not Call list, at www.DoNotCall.gov.

*Beware of online contests or “free” offers that require filling out a form or giving your wireless number.

*Ask your carrier if it offers free fraud protections, such as blocks on texts and data.

*Beware of questionable texts. The website www.SMSwatchdog.com can help you identify fraudulent messages.

If you spot a suspicious charge, first call the cramming company to dispute the charge (see if the company’s number is on the bill).

Then call the cellphone company. Inform it that you’re disputing the charge and you’re only paying the undisputed part of your bill. Make sure you agree what that undisputed amount is, and record the time of the call and the full name of the person you talk to.

Finally, file a complaint with the office of Illinois Attorney General Lisa Madigan. (Visit www.illinoisattorneygeneral.gov, or call 1-800-386-5438, for Northern Illinois; 1-800-243-0618, for Central Illinois; or 1-800-243-0607, for Southern Illinois.) Keep one copy of the complaint for yourself and send the other to the cramming company.