& cplSiteName &

FTC Charges T-Mobile Made 'Hundreds of Millions of Dollars' in Bogus Charges

Dan Jones
7/1/2014
50%
50%

The FTC is suing T-Mobile over adding bogus charges without the customer's consent, a complaint that the operator is calling "unfounded and without merit."

The Federal Trade Commission filled a complaint Tuesday claiming that the "uncarrier" made "hundreds of millions of dollars" by charging for "premium" SMS subscriptions "that, in many cases, were bogus charges that were never authorized by its customers."

The FTC claims that T-Mobile received anywhere from 35% to 40% of the total amount charged to consumers for subscriptions for content such as flirting tips, horoscope information, or celebrity gossip that typically cost $9.99 per month. The commission alledges that "T-Mobile in some cases continued to bill its customers for these services offered by scammers years after becoming aware of signs that the charges were fraudulent."

You can read the complaint here.

T-Mobile US Inc. CEO John Legere hit back quickly on Tuesday with an open letter responding to the complaint. "T-Mobile is fighting harder than any of the carriers to change the way the wireless industry operates 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," Legere writes.

He says that T-Mobile stopped billing for premium SMS services in 2013 and launched a program to "provide full refunds" for any customers that believed they were billed for "something they did not want."

"We exited this business late last year, and announced an aggressive program to take care of customers and we are disappointed that the FTC has instead chosen to file this sensationalized legal action," Legere continued. "We are the first to take action for the consumer and I am calling for the entire industry to do the same."

See the T-Mobile response here.

— Dan Jones, Mobile Editor, Light Reading

(6)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Joe Stanganelli
50%
50%
Joe Stanganelli,
User Rank: Light Sabre
7/4/2014 | 5:09:31 AM
Re: Others?
@DanJones: Compliance with which would only further raise our bills.

"FTC Consumer Billing Protection Fee: $1.97"

or whatever.
DanJones
50%
50%
DanJones,
User Rank: Blogger
7/2/2014 | 2:09:19 PM
Re: Others?
So maybe the FTC should be pushing for clearer billing from all of the operators?
Phil_Britt
50%
50%
Phil_Britt,
User Rank: Light Sabre
7/2/2014 | 11:20:46 AM
Re: Others?
Ariella is right. 

It's very easy for companies to bury things in bills (hey, government does it, too, but that's a whole different issue) that customers don't take the time to examine closely. A dollar or two here and there isn't worth finding, but if stopped early, the problem doesn't mushroom as in this instance
Ariella
50%
50%
Ariella,
User Rank: Light Sabre
7/2/2014 | 8:43:25 AM
Re: Others?
@Joe It's a great temptation to these businesses because most people will not go over everything with a fine-toothed comb or even think it to be worth the time to call and ascertain what the charges are for. (I do, but the phone reps seem really surprised that I bother over what looks like small charges)  I'm sure T_mObile and others liek it have goten away with bogus charges for years. 
Joe Stanganelli
50%
50%
Joe Stanganelli,
User Rank: Light Sabre
7/2/2014 | 2:21:51 AM
Others?
This isn't the first story we've seen like this, and I doubt it will be the last.  Considering the charges on my own phone bills, I suspect (pure speculation on my part, I admit, but still) that other companies are doing the same thing -- the idea being that they expect the eventual settlements and fines, if they are ever caught, will be far less than what they're gaining.

In any case, the lesson here is: Read your phone bill!  Review it carefully!  Make sure you understand it!  Don't put up with any garbage!
DHagar
50%
50%
DHagar,
User Rank: Light Sabre
7/1/2014 | 9:05:20 PM
Re: FTC Bogus Charges for T-Mobile
Dan, obviously highly negative publicity for T-Mobile.  They have provided a very effective response.  It appears the legitimacy of the claim will fall in the timing.  I am certain that it will also cost T-Mobile dearly in both publicity, legal fees and the people who previously didn't claim refunds will now.

They must be trying to make them a "poster child" for false claims; I am certain there are other carriers who have had similar practices, or may still have them.
From The Founder
Either we perform a complete 'factory reset' on the way the telecom industry creates and deploys virtualization, or we face the consequences.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
The Urgency of Commercial 5G Services

4|26|17   |     |   (0) comments


The progress of 5G has been closely monitored in the industry. At the 2017 Brooklyn 5G Summit, the sense of urgency for a commercial 5G launch had started to surface among operators.
Women in Comms Introduction Videos
How Diversity Helps Comcast Mirror Its Customer Base

4|26|17   |   2:55   |   (0) comments


Diversity brings innovation, creative ideas and a way to reflect the broad spectrum of your customer base, Comcast Director of Customer Experience Jenelle Champlin says.
LRTV Huawei Video Resource Center
Mobile Operators & Video

4|25|17   |     |   (0) comments


Ovum's Ed Barton discusses the latest mobile operator strategies for mobile video.
LRTV Custom TV
Infinera Introduces Instant Network

4|20|17   |     |   (1) comment


Mike Capuano, vice president of marketing at Infinera, discusses the advancement from Instant Bandwidth to new Instant Network capabilities, which include Bandwidth License Pools, Moveable Licenses and Automated Capacity Engineering (ACE).
Women in Comms Introduction Videos
Vodafone's Eubank on Sponsors, Mentors & Moving On Up

4|19|17   |   4:25   |   (0) comments


Vodafone America's Head of Operations Kimberly Eubank breaks down the difference between a sponsor and a mentor and shares why both made a big difference in her career.
LRTV Custom TV
NYC Auto Show: Are We Smart Yet?

4|18|17   |     |   (0) comments


The auto industry is facing some big transformations as electric vehicles, autonomous technology and connected cars are seen as the future of the industry. During the much-anticipated NY international auto show, there was an emergence of new technology and mobility service on the show floor. Aside from performance, brands like Lincoln, Hyundai, Honda, Mercedes and ...
LRTV Huawei Video Resource Center
The Impact of Video

4|18|17   |     |   (0) comments


David Mercer from Strategy Analytics discusses the impact of video on current strategies.
LRTV Custom TV
Pardeep Kohli Discusses Network Transformation & the Market Opportunity for the 'New' Mavenir Systems

4|13|17   |     |   (0) comments


In a brief discussion at MWC 2017, Heavy Reading analyst Adi Kishore talks to Pardeep Kohli, CEO, Mavenir Systems about the creation of the 'new Mavenir' and some of the key challenges facing operators in today's market. A key theme of the discussion centers around operator need for software-only, virtualized solutions and how they will need to adapt to ...
Women in Comms Introduction Videos
Tech Maverick Shares Her Tips for Gender Inclusivity

4|12|17   |   7:28   |   (0) comments


Wendy Hall Bohling, a corporate escapee, author and gender exclusivity consultant, tells her story of sexism, bias and progress along the road to gender equality in the workforce.
LRTV Huawei Video Resource Center
Huawei at MWC 2017

4|11|17   |     |   (0) comments


At Mobile World Congress 2017, the biggest mobile industry gathering of the year, Huawei showcased its new innovations and solutions with the theme "Open Road," which focuses on cloud, 5G, operation transformation, videos and consumer-oriented products. Its campaign has been recognized by three awards given by GSMA.
LRTV Custom TV
China Telecom NFV Infrastructure on RSD

4|6|17   |     |   (0) comments


Lynn Comp, senior director of market development of Intel, is joined by Chong Zhang, storage engineer at Inspur and Ou Li Yan, architect for technology strategies of China Telecom, for a discussion of what NFV brings.
LRTV Custom TV
Nokia's IMPACT Software Demo

4|6|17   |     |   (0) comments


Khamis Abulgubein of IoT market development at Nokia demonstrates IMPACT (intelligent management platform for all connected things), a software solution with a horizontal approach to managing any device on any application.
Upcoming Live Events
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Brazos Hall - Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Surprise! AT&T Markets 4G Advances as '5G Evolution'
Dan Jones, Mobile Editor, 4/25/2017
Did Verizon Outbid AT&T for Straight Path?
Dan Jones, Mobile Editor, 4/25/2017
First Year TIPs the Scale Toward Success
Denise Culver, 4/24/2017
Netflix Set to Enter China
Mari Silbey, Senior Editor, Cable/Video, 4/25/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.