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

Dan Jones
7/1/2014
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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

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Joe Stanganelli
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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
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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
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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
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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
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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
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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.
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