T-Mobile addresses FTC allegations that they knew about unauthorized SMS charges, yet did nothing

John Legere

We love the vast majority of the moves T-Mobile has been making as part of their Uncarrier movement. Since Uncarrier was first introduced, we’ve seen T-Mobile effectively abolish early termination fees, introduce an early upgrade plan, and even make data roaming free for their customers. But that doesn’t mean every move from Magenta’s camp has been sitting well with consumers.

In fact, in a recent press release the Federal Trade Commission has filed a complaint against T-Mobile, charging the Uncarrier with profiting from fraudulent SMS subscription to the tune of hundreds of millions of dollars. The FTC alleges there were clear signs that the SMS scams were fraudulent, with the charges seeing nearly a 40% refund rate. It’s this part alone that should have sent up red flags at T-Mobile, but yet they did nothing.

It’s this, coupled with a high number of complaints and charges buried in 50 page billing statements that the FTC believes T-Mobile should, at the very least, repay back some of these charges. The FTC is also looking for a court order to prevent T-Mobile from engaging in what they call “mobile cramming” (hiding itemized usage charges from 3rd parties).

The always outspoken T-Mobile CEO John Legere issued his own response to “set the record straight” about the allegations from the FTC, calling them unfounded and without merit. What’s more Legere goes on to tout T-Mobile’s Uncarrier movement which has been all about the consumer, citing their recent decision to completely stop charging for subscription SMS services, offering full refunds for anyone that may have been affected. Of course, it’s entirely possible T-Mobile knew about the FTC’s investigation and changed policies to help in an effort for damage control — but that’s none of our business.

Legere says T-Mobile has been first to take action for the consumer and looking at their recent moves, he’s not just blowing smoke. Legere calls the FTC’s complaint sensationalized and feels that they’re being unfairly targeted when the rest of the industry faced the same issue of unauthorized SMS charges.

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  • KOLIO

    Anyone think the competition has a hand in this B.S.?

    Instead of improving their network AND providing a great value,they’d rather resort to pulling T-Mo down to their level.

    • http://www.scottcolbert.com/ ScottColbert

      I was thinking the same thing.

    • paxmos

      Nope, they call this capitalism.

      • LeeArtis

        I second that motion

        • LeeArtis

          I’d also call it evil.

    • saynotopunx

      I couldn’t help but think the same thing. T-mobile is a huge corporation that is trying to distance itself from the ‘customer pokes’ of the industry as a whole. How better to ruin their credibility as a whole than this?

    • TheRealBBOX

      Sure, conspiratards think “the competition has a hand in this B.S.” Holy shit you people are unreal in your hilarious blind worship of T-mobile.

  • t moible is lying

    T-MO’ BILL
    The backlash against T-Mobile in the US is officially underway

    It feels like just last month, TMobile CEO John Legere accused Verizon and AT&T of “raping” (ugh) its customers and that “the fuckers hate you”.

    In a complaint filed today, the Federal Trade Commission is charging mobile phone service provider T-Mobile USA, Inc., with making hundreds of millions of dollars by placing charges on mobile phone bills for purported “premium” SMS subscriptions that, in many cases, were bogus charges that were never authorized by its customers…

    The FTC alleges that T-Mobile received anywhere from 35 to 40 percent 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. According to the FTC’s complaint, 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.

    T-Mobile: We Shouldn’t Be Sued Over Bill-Cramming Because We’re Not Doing It Anymore & We’re Super-Sorry

    Earlier this afternoon, the Federal Trade Commission filed a complaint against T-Mobile, alleging the wireless carrier made hundreds of millions of dollars off of bogus premium text-messaging charges “crammed” onto customers’ bills. The response from T-Mobile CEO John Legere isn’t exactly what you would describe as contrite.

    “We have seen the complaint filed today by the FTC and find it to be unfounded and without merit,” writes Legere. “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.”

    So there you go, America. T-Mobile shouldn’t be sued for something it made a mountain of money from because it is no longer making that mountain of money and it’s offering refunds to customers who “feel” they were charged for something they didn’t order.

    Legere — who struts around in a leather coat, crashing his competitors’ parties, has a history of making grandiose statements about his company and blatantly mocking his much bigger competitors, and who recently used the word “rape” in reference to AT&T and Verizon — calls the FTC suit “sensationalized,” which is a bit like Bob Hope calling Bing Crosby dead.

    Legere comes across like the snotty teen who got caught doing something wrong and then cops an attitude when he’s told that “I’m no longer doing it” does not wipe away the transgression.

    In speaking with reporters after today’s announcement, Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, explained that the agency “did engage in settlement negotiations with T-Mobile, but were not able to reach a settlement.”

    Here is the entire statement from Legere, presented in appropriately colored text:

    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.” said John Legere, CEO T Mobile USA. “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, 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.

  • Nupicasso

    Yupers

  • JointhePredacons

    Reps have said that these extra charges are from people clicking on things they shouldnt be clicking on, thinking theyre free, when theyre not. These are not standard or hidden charges.

    • Nearmsp

      Wrong! I was repeatedly charged these fees for special subscription services and had to waste my time getting them cancelled. I never clicked on anything. I had to shut of all internet and web messaging on all phones to prevent this happening.

  • Julio Rivera

    Absolutely agree with JointhePredicons. People who are not savvy, run around clicking on everything they see and then get mad when there are odd charges on their accounts. The nice thing is that TMo is very good about clearing that stuff up. Usually only takes one calm and educated phone call.

  • claas kuhnen

    If the FCC only targets TM and considering ATT and Sprint tried/tries to buy them one could think that this is a stunt by the competition against TM and their value.

  • ReverseRoxas

    In these comments: Conspiracy Theory.

  • MG83

    A friend of mine has an iPhone 5 that’s jailbroken. He download some spoof calling app and we had our laughs with it. He called T-Mobile on something unrelated and the CS rep “saw some charges that alarmed her.” It was close to $250 in international calls. The CS rep went through the process and confirmed everything came from his phone. It took him a minute to realize that it was the app, but at this point he played dumb and said it was probably a malicious app or something his 5 year old got into. Turns out the app routed the calls to Belgium first at $4.99 a minute! The CS rep wiped it clean as he was a long standing customer, and blocked all international calls until further notice.

    We bust his balls about it. BUT that’s the risk you take when you jailbreak/root your phone and install apps that you don’t know about. The same goes with having those idiots from Jamster send you jokes and singings GIFs for $10 a month, or your horoscope for $2.99 a day. He and everyone else should be aware of what they’re doing with apps and texts to 5 digit numbers.

    Users need common sense and putting the blame solely on T-Mobile isn’t fair. The FTC should have addressed all carriers with this issue. AT&T and Verizon are the 2 shadiest telecoms in the country. They’re innocent in all this? I call BS. They were probably jumping in the piles of money like Scrooge McDuck.

    • saynotopunx

      Thanks for sharing your experience and details about where charges have originated from. People act like it’s T-mobile just adding shit on people’s accounts, but it’s T-Mobile allowing third party content providers to bill you for their services through the consumer’s wireless provider when your kid clicks on a ton of ads in the free games on your phones.

      This is why I never let my kids play on my phone.

    • http://www.heliosoptix.com Steven Skwarkowski

      If you read into this at all, you will see that the FTCs findings show that many customers were opted into a service without there knowledge.

      We’re not talking about Rooted phones here folks. 95% or more of the population doesnt do this!

      What was happening is most of us will get some kind of pop up offer or some crap within an app that is legit. Then a user will click on something that enters them into the monthly service. Typically the users must confirm they want to opt-in to a $10/mo charge, these secondary fail-safe style actions were NOT used.

      Users just accidentally enter themselves into something and they have no idea of its existence. Its not failure to read something, its tricking people. Not everyone knows how to use smartphones 100% accurately. The fact that TMo knew this, pockets 30%-40% of these shady profits and does nothing about it, including misleading bill verbage that confuses users like “Premium Services” or the like is terrible.

      TMo knows exactly what you’re being charged for, but wont put that in the bill. Hell, they cant even give you details as to the shady BS thats on the bill.

      In my 8+ years with TMo, I have caught atleast $250+ of BS charges on my bills. I had one phone that was allowed no internet access but still somehow got a subscription service. That phone used maybe a few calls and a few dozens texts a month.

      My only legitimite mistake was I somehow opted INTO Slacker $10/Mo Premium Service. I know to avoid it because the damn thing pops up all the time at random. I didnt know why I got commercial-free and unlimited skips for 2-months til the wife pointed out we’re paying more each month. Still dont know how I opted into it as I knew better

      • JointhePredacons

        You dont get opted into a service without your knowledge. You click something on your phone because you think its awesome, and then forget its chargeable. Ive been with T-mo longer than that and have had ZERO BS charges. ZERO.

  • ljhughes8

    There should be a test to use a smart phone since so many people don’t use good sense.

    • JointhePredacons

      Lol, youre right. Dumb people using smart phones.

    • squidward tennisballs

      You realize that dumbphones can text these numbers too

  • UniBroW

    Have had T-Mobile since October, never had any of these issues. In fact, billing is quite easy on the eyes as opposed to all the fees I had with Sprint.

  • pnh

    Text “I am a moron” to 66666 and you, too, will have these charges added to your phone bill.

  • AGx

    I think that this kind of stuff is equal parts maliciousness and uneducated users. While it is possible to get signed up for this stuff without your knowledge, it’s largely only possible when your phone numbers is somewhere it’s easily visible or you’ve put it somewhere you probably shouldn’t. Apps/websites/services that want your phone number and Social Services like Facebook come to mind. The only people that have my phone number are family, friends, my banks, my employer, and potential employers (because it’s on my resume). Its unlikely that any of these places give it out and would otherwise need to be hacked to get that info.

  • Ryan Wick

    As a T-Mobile customer past 10 years I can say yes they are guilty.

  • RC

    Seems to have been deleted…. I’ll say it again. Does the word rape come to mind?

  • JointhePredacons

    3rd party charges should be self-explanatory. Most people just click here and click there on their phones, either for free caller tunes, or ringbacks. Theyre too oblivious to realize their being charged for something they brought on themselves, so suddenly its T-Mobiles fault because theyre trying to keep their bills neat. Its sad we see to be living in a world without responsibility for anything, its always someone elses fault.

  • mhmmd123

    “T-Mobile completely stop charging for subscription SMS services, offering full refunds for anyone that may have been affected” just before the FTC came up. Smart move T-Mobile… I should report my case to the FCC and to FTC too.
    I been charged for service after been paid in three months and the service it self been transferred to someone else with T-Mobile authorization.