The Federal Trade Commission accused wireless carrier T-Mobile of adding bogus charges totaling "hundreds of millions of dollars" on customers' accounts without their consent.
In a statement released Tuesday, the FTC alleges T-Mobile placed charges on mobile phone bills for premium subscriptions that were never authorized by customers.
The agency says T-Mobile participated in "cramming," a practice where the carrier places charges for services from a third-party company on consumers' bill without telling them. The FTC says T-Mobile also made it difficult for its customers to detect the charges.
"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," said FTC Chairwoman Edith Ramirez in a statement. "The FTC's goal is to ensure that T-Mobile repays all its customers for these crammed charges."
FTC's Jessica Rich says T-Mobile was "deceptive and unfair" because the company had let charges from third-party companies continue on consumers bills after "clear warning signs those charges were fraudulent."
T-Mobile could not be reached immediately for comment.
The FTC allegations arrive as T-Mobile is attempting to distance itself from its competitors with its selection of "Uncarrier" wireless plans aimed at eliminating contracts. Last week, the company introduced free music streaming and the ability to try a new iPhone for free.
During the "Uncarrier" push, T-Mobile CEO John Legere has been on the offensive about wireless rivals loading up customers with restrictive contracts and high fees.
The company has also been the subject of merger talks with fellow wireless carrier Sprint. The deal is reportedly worth as much as $50 billion.