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John Legere says the FTC complaint is without merit

T-Mobile has raked in hundreds of millions of dollars by placing phony fees on customers' wireless bills, according to the Federal Trade Commission (FTC). 

The FTC filed a complaint Tuesday against T-Mobile for hiding bogus "premium" text message charges on customers' phone bills, and making a profit of about 35 to 40 percent of the total amount charged -- which amounted to hundreds of millions of dollars. 

The "premium" text messages -- which are typically in the form of a joke of the day, horoscope or love tips -- can cost around $9.99 a month. Many are offered by a third-party service, and T-Mobile gets a percentage of the charge.

The act of putting a charge on a customer's bill without their knowledge is called "cramming," and it's frowned upon in the wireless industry. In fact, the FTC launched its first lawsuit to end mobile phone bill cramming in April 2013. U.S. carriers agreed in November 2013 to ban companies from sending these kinds of premium messages.

"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. "The FTC's goal is to ensure that T-Mobile repays all its customers for these crammed charges."

The FTC is going after T-Mobile for not only placing fraudulent charges on customers' phone bills, but also making it rather difficult to find these third-party charges. For instance, the FTC said that T-Mobile would bury the charges in a 50-page bill under several different headings and abbreviate it as something like "8888906150BrnStorm23918" so that the customer couldn't easily find it. 
 

When customers were able to figure out that they were being slammed with bogus charges, T-Mobile allegedly failed to provide full refunds to some who requested it. 

The FTC said that because such a large number of customers were seeking refunds, it was an obvious sign to T-Mobile that the charges were never authorized by its customers. Internal company documents show that T-Mobile had received a high number of consumer complaints at least as early as 2012.

T-Mobile CEO John Legere has since responded to the FTC complaint, saying that it is "unfounded and without merit."

Here's Legere's full statement: 
We have seen the complaint filed today by the FTC and find it to be unfounded and without merit.  In fact T-Mobile stopped billing for these Premium SMS services last year and launched a proactive program to provide full refunds for any customer that feels that they were charged for something they did not want.  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.
 
As the Un-carrier, we believe that customers should only pay for what they want and what they sign up for. 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.  We are the first to take action for the consumer and I am calling for the entire industry to do the same.
 
This is about doing what is right for consumers and we put in place procedures to protect our customers from unauthorized charges. Unfortunately, not all of these third party providers acted responsibly—an issue the entire industry faced.  We believe those providers should be held accountable, and the FTC’s lawsuit seeking to hold T-Mobile responsible for their acts is not only factually and legally unfounded, but also misdirected. 

 
T-Mobile has been calling itself the "UnCarrier" for about a year or so now thanks to its efforts to end typical practices and overcharging by most wireless companies. For instance, T-Mobile offered a free unlimited international text and data plan in October 2013 and a "Get Out of Jail Free Card" that pays up to $350 per line in ETFs when switching from Verizon, AT&T or Sprint over to T-Mobile.  

It's hard to say if T-Mobile can continue to wave its UnCarrier flag, though, if the FTC's latest findings are true. 

Sources: PR Newswire, T-Mobile



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They rip me off badly
By justinlinh on 7/2/2014 1:41:53 PM , Rating: 4
I was with them for about 4 years and decided to go with other carrier. Within the 7 months after the departure, i kept received the bill state that my account is still active under some unknown line. I was ending up paying them twice about $60/bill. The very last bill they send to me was like 10 months after and was like about $56 or something and i call them. I told them about my account has been closed for months now and why keep sending me the bill. I told the t-trouble girl on the phone that i will paid the last time and i will recorded the conversation. She was flip and asked me to stop the recording or she'll hang up the phone.

That moment i knew they are trying to rib me off!




RE: They rip me off badly
By hughlle on 7/2/2014 5:32:59 PM , Rating: 2
Why did you wait so long to query it? And why did you pay in the mean time?

I had an issue with a company trying to charge me after a contract had completed, claiming it was auto renewing despite never having disclosed this to me. I said i'll happily pay if you post me all the documents proving their claim. No documents ever showed up and i never heard from them again.


RE: They rip me off badly
By retrospooty on 7/2/2014 6:34:20 PM , Rating: 5
It sounds like a billing error more than predatory practices. Based on what you said (which was limited, so forgive me if I have it wrong)

2 scenes come to mind. The right way to handle billing error:
- Customer calls when 1st bill comes - Why am I being billed, I canceled the account.
- T-Mobile - We don't have your cancellation.
- Customer - Well, cancel now, I am not using it and I wont pay.
- T-Mobile - (has no choice but to comply).

The wrong way to handle billing error:
- Customer calls 7 months after cancelled and still paying- Why am I being billed, I canceled the account.
- T-Mobile - We don't have your cancellation.
- Customer - Well, cancel now, I am not using it and I want a refund.
- T-Mobile - SUUURE you werent using it. Then why didn't you handle it by calling us?.


RE: They rip me off badly
By BurtNeal on 7/2/2014 6:51:11 PM , Rating: 2
I had the same problem with Verizon a few years ago. Any time I put my # in an internet ad posting, I was getting charged $9. I must have done this 10 times because I had a $90 addtl. charge on my statement. According to Verizon these were "Premium" texts that I authorized.

Since I'm not a big texter, I just cancelled my texting completely. Of course I had to call Verizon to have them do it. I couldn't find anyway to do it using my online account.


RE: They rip me off badly
By Cheesew1z69 on 7/2/2014 8:52:31 PM , Rating: 2
quote:
Any time I put my # in an internet ad posting, I was getting charged $9. I must have done this 10 times because I had a $90 addtl. charge on my statement. According to Verizon these were "Premium" texts that I authorized.
That doesn't make sense, putting your number in an ad, wouldn't cause premium texts.


RE: They rip me off badly
By Darksurf on 7/3/2014 4:07:12 AM , Rating: 2
I know what you mean. They sold me a plan while I was in college promising coverage back home and excellent 3g where I lived. I bought into the scheme. After the first week of not having 3G I called in and asked about it. They told me the towers were under maintenance in my area. This went on for months. I lived in OK during the time. Thunder storms were common in the area. They kept telling me the tower was hit my lightening.

I kept rolling with with it. Customer service seemed nice enough and I was told the same thing by several people there was no way it was a lie right? So I went home about 5 months in and guess what? ZERO COVERAGE. This was not what I was promised. I was furious. I called and complained over and over.

Finally I got a Customer Service agent and spoke about the 3G in my area I was supposed to have, she acted confused. She says "What are you talking about? There has never been 3G in you area and there are no plans to bring 3G to that area." I was ready to explode. I finally started calling and harassing MGRs trying to get out of my plan but they all wanted to charge me $700 ETF. I told them I was lied to and cheated. They said "I'm sorry sir, but our policies prevent us from helping you."

I was appalled! I finally got ahold of someone who said they could help me. He gave me a link to a form and told me "just cancel the contract and fax this form to this number and they will waive the ETF". I did so and he helped me convert to Verizon. Guess what? I received a letter in the mail telling me they refuse to waive my ETF and wanted $700. This was months after I had paid my "final bill" and they said I was done!

I refused to pay. So they dinged my credit. I've fought them, I spent a little over $1000 to a firm and got it removed from my credit. Only to have them sell "my debt" to another company and place it back on my credit. Credit Bureaus don't care either. They don't care about you.

TMO can die. I'll never go back. I won't pay them a dime.


RE: They rip me off badly
By MalcolmTucker on 7/4/2014 5:50:40 PM , Rating: 2
T-Mobile is a company that is built on absolute compliance. They really seem to lack coverage, so I'm glad I switched. In the past AT&T didn't have coverage where I lived.

I have Cricket now. Only a few months ago, Cricket was purchased by AT&T. So if you have a locked iPhone on AT&T, you can put a Cricket SIM card in it, and get AT&T coverage with unlimited voice and text, and roaming is included.

On T-Mobile, I was paying $50 for unlimited service and 500MB of data.

Now on Cricket, I pay $55 for the Cricket Pro Plan when setup on auto-pay. I get 5GB of fast LTE data, on AT&T's network, which works places T-Mobile doesn't. It's a no contract plan.

I decided to give it a try when I was scammed by a guy who said I could get a phone unlocked. They wanted more money to make it work, so I just setup a compatible service.


Hilarious
By anactoraaron on 7/2/2014 3:02:34 PM , Rating: 3
quote:
"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. "The FTC's goal is to ensure that T-Mobile repays all its customers for these crammed charges."

The FTC is going after T-Mobile for not only placing fraudulent charges on customers' phone bills, but also making it rather difficult to find these third-party charges. For instance, the FTC said that T-Mobile would bury the charges in a 50-page bill under several different headings and abbreviate it as something like "8888906150BrnStorm23918" so that the STUPID LAZY ASS customers couldn't easily find it.


I don't know about you, but if my bill suddenly jumped up $20+ in a month I would be combing through every single page to find out why. A "28573964693SkinnyJeans08" would IMMEDIATELY warrant further investigation on my end (much more so than a normal phone number).

The fact that stupid people are signing up for these stupid joke texts and then they cry about the additional charge when they see their bill is a sad true joke about the current state of our society.

I love my service with T-Mobile and I never had any hidden charges on my bill. But then again, I'm not some idiot texting "funny" to #2343 either.




RE: Hilarious
By geddarkstorm on 7/2/2014 7:09:31 PM , Rating: 2
Such has happened to me at least 3 times with T-mobile (over like.. 8 years, so not an often occurrence). I immediately did just as you said and then called them up, and got the issues resolved. They've been very good to me customer service wise, but I know not everyone's experiences are remotely the same.


RE: Hilarious
By ShaolinSoccer on 7/2/2014 8:26:38 PM , Rating: 3
We're on the Framily plan with Sprint. When we first started it, we were told it came with unlimited data. Next thing I know, my aunt gets a bill with over $100 extra charges for going over a 2GB data limit (for watching Youtube movies/videos). She has 4G connection so it was rather easy to do. Anyways, we called them up and told them that the plan comes with unlimited data. They said "No it doesn't. You have to pay an extra $20 a person for that." We asked them why they didn't tell us that in the first place and they said it was because we didn't ask. We threatened to cancel all accounts with Sprint unless they waived the $100 and start charging her $20 a month. They complied.


Bigger fish
By Gunbuster on 7/2/2014 3:38:01 PM , Rating: 4
Why is the FTC wasting time on this when they need to be deploying two tactical nukes to end the unrelenting "Credit Card Services" and "GE Security system" robo call scams.




cramming, slamming
By Mike Acker on 7/3/2014 8:39:30 AM , Rating: 3
the phone companies used to do this-- back then it was called "slamming", now they call it "cramming". at best it is fraud; most likely it should be prosecuted under RICO as extortion.

we need broadband and wireless all reclassified under Title II as public utilities. competition doesn't seem to get it with these [deleted] .

another thing T-mobil does is advertise service at $$$ per MONTH and then charge for 30 days. these guys definitely need to go to detention.




T-Trouble is horrible!
By justinlinh on 7/2/2014 1:50:07 PM , Rating: 2
T-Trouble is horrible!
T-Mobile = T-Trouble = Horrible.




watch your taxes
By carigis on 7/3/2014 1:55:56 PM , Rating: 1
t-mobile was charging me taxes based on my cell phone number exchange they issued me .. very high local tax.. rather then my actual residence...even when I was living in another state but had the same number.. they ended up refunding me 10 years of back taxes after alot of bitching on my part when I noticed it and told them they were fraudulently collecting a tax they legally had no right to do. noone over the phone would refund me I had to go to there support site and track someone down.




Oh T-Mo, you must learn...
By EasyC on 7/2/14, Rating: 0
It's not T-mobile, it's stupid people
By chµck on 7/2/14, Rating: -1
RE: It's not T-mobile, it's stupid people
By fic2 on 7/2/2014 12:40:42 PM , Rating: 1
Really? The "everyone is doing it" defense? So, they are in elementary school?

Tmo doesn't seem to be "acting transparently" if they are burying the charge as 8888906150BrnStorm23918.

Although, if I received a 50 page bill I would be wondering what the f&ck was buried in there.


RE: It's not T-mobile, it's stupid people
By BRB29 on 7/2/2014 1:03:44 PM , Rating: 2
It's not a defense but it raises the question of selective reprimand. Why go after Tmo only? If the FTC thinks it's ok for the rest of the industry to do it, then why punish Tmo?

BTW Verizon and AT&T is way worse with this problem. Although if you spot it and complain, they credit the charge for you. It's still annoying as it is always buried in your statement. With so many people using automatic pay and going paperless, it's even harder to spot.

i remember my Droid X2 from Verizon come stock with a game I can't delete. As soon as I opened it, it charged my account $5.


By retrospooty on 7/2/2014 1:08:34 PM , Rating: 2
"BTW Verizon and AT&T is way worse with this problem. Although if you spot it and complain, they credit the charge for you."

I just posted my Verizon issue below, but didn't address the crediting. Verizon did not credit me back. They did block the service once I asked them to , but I didn't get anything back.


By retrospooty on 7/2/2014 1:05:47 PM , Rating: 2
I can confirm Verizon does it. They did it to me. I never thought about having to specify "blocking pay for text" as I would never text out things like that, but its for incoming texts... For several months my bill was $10 higher than it should be, when I called, they tell me, "Yeah, you have been receiving an info text service that costs $10 a month". I had been receiving these odd trivia text like once a month, I just thought was spam... It would be like "did you know the average lifespan of the male African elephant is X years?" - $10 hidden fee for that gem. Gee, thanks Verizon.

They did stop it when I told them to block the service, but it was all very shady.


RE: It's not T-mobile, it's stupid people
By flatrock on 7/2/2014 12:49:28 PM , Rating: 2
Except that T-mobile kept doing business with these companies long after they had been aware of allegations of cramming by them and up to a year after those companies were dropped by other carriers for cramming.

T-mobile's bill were also far from clear and did more to hide the charges than make customers aware of them. Charges would be listed among usage charges with the details of the charge often 10s or even 100s of pages later in the bill.

The all carriers do it argument doesn't hold up because other carriers stopped dealing with these companies that were cramming long before T-mobile and I find it hard to believe that T-mobil wasn't aware that had happened and why.

As for acting transparently, the bills were apparently far from transparent from what I have seen, and there are many allegations that T-mobile made it difficult to get a refund.

Also since it is T-mobile which has a service agreement with their customers, it is their responsibility to ensure the charges are valid and authorized by their customers. The excuse that these companies misled them into thinking the charges had been authorized by the customer only works so many times, and let's face it. T-mobile could have just required the customer to contact T-mobile directly to request the service rather than letting a third party claim the service was authorized.


By BRB29 on 7/2/2014 1:06:59 PM , Rating: 2
Years? I doubt it.

TMo is and had been refunding everyone with these cramming charges. This case had merit last year maybe, but it is too late.


RE: It's not T-mobile, it's stupid people
By dgingerich on 7/2/2014 2:31:04 PM , Rating: 2
As a current T-mobile customer, I can vouch for their transparency. My bill is two pages, and that is with a few premium features like insurance and roadside assistance and a couple dozen calls and texts per month, and their format lets me know exactly what each and every thing is. I don't know who the heck is complaining about a 50 page bill, but if they hare, they're causing it themselves. If they're signing up a dozen phones and making hundreds of calls and texts per month that causes their bills to get this long, it's their own darn fault. Also, if they text to these idiotic "find out who your lover is" or "to get this song as a ring tone" companies, that's their own fault. Let the idiots rot. This should not be a country ruled by idiots.


RE: It's not T-mobile, it's stupid people
By TheDoc9 on 7/2/2014 4:54:32 PM , Rating: 2
It's probably kids that don't know any better, then the parents see the bill and they call to complain. I can see the drama unfolding now; parent screams at kid, kid pretends he doesn't know, parent screams at t-mobile.

Not saying this is every instance but I'm sure it accounts for a lot of it.


By TheDoc9 on 7/2/2014 4:55:56 PM , Rating: 2
It's odd how t-mobile is rapidly growing and having real success, then this story drops.


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