T-Mobile Made Millions With Fake Customer Charges, Uh-Oh
Amid T-Mobile's efforts to separate itself from the crowd of mobile carriers by offering contract-free plans, the Federal Trade Commission is alleging that T-Mobile made "hundreds of millions of dollars" off customers in recent years — without customers knowing it. FTC released a statement on Tuesday announcing T-Mobile took part in a practice called "cramming," where third-party company charges for special services appear on customer bills without informing them.
Plus, T-Mobile did not clearly state the charges were from a third party on customer bills. Yeah. You don't want to be a T-Mobile customer right now.
According to the FTC complaint, which was filed in Seattle Tuesday in a federal court, T-Mobile customers were charged for premium text messaging services, such as a daily horoscope text that could run about $10 per month, even though customers didn't consent to such services. Apparently, numerous customers complained about the services, which are scams, and still walked away with nearly 40 percent of the profits, knowing the charges were fraudulent. Way to go, T-Mobile. Edith Ramirez, FTC Chair, released the following statement on Tuesday:
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. The FTC's goal is to ensure that T-Mobile repays all its customers for these crammed charges.
T-Mobile released a statement on the company's media relations page late Tuesday, blasting the FTC complaint:
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.
The FTC did try to reach a settlement with T-Mobile, but wasn't able to at this time. Plus, a separate investigation has been launched by the Federal Communications Commission.