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T-Mobile has been aggressively marketing its Uncarrier initiatives to prove that it cares about customers, but the Federal Trade Commission has published a new complaint that accuses the carrier of knowingly cramming bogus charges onto customers’ phone bills for years. The FTC claims that T-Mobile made hundreds of millions of dollars by knowingly placing charges for “premium” SMS subscriptions that, most often, were not authorized by customers… 

According to the official FTC complaint (PDF), unauthorized charges often came in the form of monthly subscriptions from third-party merchants, for content like ringtones, wallpaper, horoscopes, flirting tips, celebrity gossip and similar information. T-Mobile typically charged consumers $9.99 per month for these subscriptions, as recently as December 2013.

“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,” the FTC writes. “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.”

The act of third-party billing without customer authorization is known as “cramming,” which is something the FTC has been aggressively fighting over the years. In the last year, it has held a public workshop on mobile cramming and filed lawsuits against mobile cramming operations Jesta Digital, Wise Media, and Tatto Inc. T-Mobile is said to have billed customers for services from each of those three companies.

“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 confusing billing practises that T-Mobile uses likely contributed to the difficulties in customers tracking these charges, which were labeled as “Premium Services” and buried under a separate heading within the online billing portal. T-Mobile did not distinguish the charges as being part of a monthly, recurring subscription, nor did they enable customers to view the charges individually.

Premium Services T-Mobile

The charges were often vaguely disguised on phone bills with names like “8888906150BrnStorm23918,” and customers that were on pre-paid billing cycles were having these charges withdrawn from their account without their knowledge. The FTC claims that T-Mobile provided some customers with partial refunds, but often times gave none at all.

The FTC’s complaint in the U.S. District Court for the Western District of Washington seeks a court order against T-Mobile that will permanently prevent the carrier from mobile cramming and force it to offer refunds to all affected customers. While the FTC has “reason to believe” that T-Mobile is guilty of these fraudulent actions, it will be up to the court to impose legal sanctions.

Update: John Legere commented on the matter:

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.

– John Legere, CEO of T-Mobile USA

  • mlee19841

    I swear verizon does this to. But in a different way.

    • D R

      they all do it, because it makes them millions and millions of dollars.

      the cep’s response is basically “we stopped doing this last year, and quietly payed back the few people who figured out what we had done to them, so obviously the problem has been completely resolved and everybody is doing it and I am keeping my bonus money”

  • Shelagh

    I bet ROGERS in Canada is 100% guilty of the exact same fraudulent action

  • Bugs Bunnay

    I guess I must be one of the lucky few that never received this charge? Never had a problem with them for about what 6, 7, 8 years (don’t remember)? I check all my bills for inconsistency anyways since I’m pretty strict when it comes to exchanging my work hours for their service. Gotta keep a tight lock down on these things.

    • I learnt that the hard way, and now do the same with ALL my bills.

      • Antzboogie

        Me too I question every charge even if it’s tiresome sometimes.

  • Tony Trenkle Jr.

    Another way why these carriers are ALL about making money. They dont give a shit about the customer. None of the carriers really do.

  • Jose Gonzalez

    This explains why my mother in law came at me with such allegation that I had purchased something for ten bucks when I never did. I want my ten bucks back!

    • dbraxt09

      SHE JUST CALLED ME SAID YOU AINT GETTIN S***

      • Jose Gonzalez

        ok?

  • highNiggaPie

    Yep they did this to me I called and had them remove it such BS what these phone companies do they really need to be more regulated by the govt either that or every single person should cancel their contract and see how well these companies would do without us which would obviously never happen

  • Rowan09

    They all rip us off.

  • A’s Network

    FreedomPop is the answer to everything. Good service and customer support.

    • Bugs Bunnay

      FreedomPop surely is the answer… to a certain degree. paid only 20 bucks for the overdrive refurb a year or 2 ago and never charged me anything since. Last week ordered another device to a separate account except that this time the device was FREE. It’s a refurb photon btw and it came in just this morning. This thing is literally half the thickness of the overdrive except it doesn’t have a screen, but i’m not complaining.

      • A’s Network

        I have a Galaxy S2 activated with them and I’m impressed with the decent service I have with them, especially considering it is free 🙂

        More people need to do this. T-Mo does 200MB for the iPads free but that is kinda low for tech savvy people. Not complaining tho, its free.

  • Sounds like those social-engineering tricks you come across on the internet that tell you something along the lines of “Enter to win an XBox/PS3/iPad/iPhone”. In such social-engineering tricks, you’ll be requested for your mobile phone number AND your carrier. If you follow through, you begin receiving those fraudulent text messages at a premium rate.

    I once fell for this with my first mobile phone (it was for an XBox 360), and ended up with a bill that cost more than the console itself

  • Der Faust

    kinda reminds me of how various movie rental chains made crazy amounts of money for bogus late fees…..