T-Mobile accused of making hundreds of millions of dollars with bogus charges

[Himanshu Arora]

T-Mobile US has been accused of cramming third-party charges into bills. The FTC yesterday filed a lawsuit (PDF) against the wireless carrier alleging that the company knowingly charged its customers for a premium texting service that was never authorized by them. The Federal Communications Commission has also opened an investigation into the issue.

The FTC claims that T-Mobile fraudulently billed its customers for third party services like $10/month horoscopes, dating tips, and more. The government agency also accused the company of collecting a 35 to 40 per cent share, even after being made aware that these subscriptions were scams.

Not only this, the company also reportedly disguised the bill details with confusing labels like “8888906150BrnStorm23918” in order to make it difficult for the customers to understand why were they being charged for.

When customers disputed the charges, the carrier either offered partial refunds or simply ignored the complaints. In some cases, the company even asked consumers to seek refunds directly from the scammers.

"We have alleged that T-Mobile took a hefty cut out of these charges", said Jessica Rich, FTC director of consumer protection. "In aggregate this has translated to hundreds of millions of dollars in revenues for T-Mobile". The lawsuit calls for T-Mobile to issue refunds.

Moving quickly, T-Mobile termed the lawsuit as "unfounded and without merit". In a statement released yesterday afternoon, CEO John Legere said, "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".

T-Mobile recently launched a slew of consumer-friendly “Uncarrier” announcements including paying early-termination fees, killing wireless contracts and overages, and more, forcing other big players to play catch-up.

The news comes days after Legere compared phone contracts used by AT&T and Verizon to violent sexual assault. Speaking at the company's Uncarrier 5.0 event in Seattle, he said, “These high-and-mighty duopolists that are raping you for every penny you have. The f***ers hate you”.

Permalink to story.

https://www.techspot.com/news/57292-t-mobile-accused-of-making-hundreds-of-millions-of-dollars-with-bogus-charges.html

 

[psycros]

Deeply disappointing if its true. While I find Legere's confrontational, potty-mouthed style to be the antithesis of how a CEO should behave, T-Mobile has definitely shaken up the industry of late. I'd hate to think they were guilty of the same fraud that AT&T was nailed for.

 

[SantistaUSA]

What's new? Don't all carriers do that?

 

[Guest]

Pot, meet kettle. Lol.

 

[Guest]

The problem is rampant in the wireless industry. If T-mobile had not been as aggressive in going after market share they probably would have remained unnoticed. Verizon took more then 10 years to remove unwanted insurance charge despite multiple trips to company stores. It wasn't until a stop at a franchise outlet that the insurance charge was dropped; however, shortly afterwards an unexplained, unknown usage charge appeared appeared on the bill. With direct billing it was impossible to stop them from charging until the card was changed. ATT when area code was split used the opportunity to zero a balance due me. Southern Bell wanted a whomping big deposit for service when on Temporary Duty in Texas and when the mission was over though the sum of all charges did not exceed the deposit that was money long gone. Reiterating the wireless industry is a revival of the Robber Barons of the 19th century.

 

[cmbjive]

T-Mobile doesn't put those charges on people's phones. People use their phones and do stupid things with them and don't read the fine print from these companies that charge directly to their phone bill. When I used to work for Verizon Wireless every other call would be from some person who started using a service, but didn't stop to read the print that said he or she would be billed $9.99 a month on their phone bill. It is an unscrupulous practice, to be sure, but chances are T-Mobile, like Verizon Wireless, does not endorse or benefit from these companies from using their phone services for billing purposes.

I'm not surprised that T-Mobile is being sued, but I would have thought that someone would have raised a complaint back when this practice was in its infancy.

 

[Guest]

My husband and I were a victim of this! We called tmobile about the charges and they told us some bogus story about something we never signed up for!

 

[flyonthewall]

I was dealt with fraudulently years ago by T-Mobile and I will never use them again. Yes, the industry is filled with abuse, but that does not make any abuse right.

 

[Guest]

Interesting that I found this article. This is 100% true. I called T mobile 3 times in the last month about this particular problem. I had a 2300 number testing my phone literally every minute some days. The first rep told me they weren't spam but 3rd party vendors, he'd block them and I would NOT be charged. He didn't do anything. The second time the girl admitted it was spam and said she'd block them and I wouldn't be charged. They were mostly blocked but I found out last week I was charge for all of them. So the third rep credited my account for the charges and I also changed my plan a bit. And now I've had a few texts from some other third party vendor.

 

[Guest]

T-Mobile doesn't put those charges on people's phones. People use their phones and do stupid things with them and don't read the fine print from these companies that charge directly to their phone bill. When I used to work for Verizon Wireless every other call would be from some person who started using a service, but didn't stop to read the print that said he or she would be billed $9.99 a month on their phone bill. It is an unscrupulous practice, to be sure, but chances are T-Mobile, like Verizon Wireless, does not endorse or benefit from these companies from using their phone services for billing purposes.

I'm not surprised that T-Mobile is being sued, but I would have thought that someone would have raised a complaint back when this practice was in its infancy.

Not true in this case. I have a "dumb" phone and didn't even have free texting on my phone plan. I use it just for calls and that is it. I received a host of gibberish texts from their admitted 3rd party vendors and was charged per text. I haven't done anything dumb with my phone because my phone is to dumb to do more than make a call.

 

[MilwaukeeMike]

I'm not surprised either... I returned a phone to T-Mobile once and it took 6 weeks and about 5 different phone calls for them to acknowledge that they actually received the phone (I had to actually call UPS to get them to verify) and then even more time to get my credit. I was transferred around and around. When I finally got to someone who knew their arse from a hole in the ground, you'd think I was on a T-Mo commercial.. she was smart, polite, helpful and got everything resolved. I think their customer service department must be 75% morons.

And this?

The news comes days after Legere compared phone contracts used by AT&T and Verizon to violent sexual assault. Speaking at the company's Uncarrier 5.0 event in Seattle, he said, “These high-and-mighty duopolists that are raping you for every penny you have. The f***ers hate you”.

Let's call this what it is... first, journalism bias at it's finest. This has nothing to do with the story and is just an attempt at riling up the reader and/or trashing T-Mo. But... that doesn't excuse what he said, which is inexcusable. People who use rape as a metaphor like this have no idea what it really means. Why not just say Verizon is like a disturbed teen with an assault rifle, and it's customers are the high-school bullies about to be put down? No taste, no class, no professionalism, and clearly no desire for new customers.

 

[ashram82]

Except the 8888906150 BmStorm23918 is clearly from Shaboom Media and listed under your premium data..use some logic instead of some sensational journalism please!!

 

[emilycatherine]

Third-party paid services or purchases are NOT "usage". They did this to me, as well, and tried to tell me that I had to have requested the service and sent confirmation texts to sign up. I had gotten two texts saying to reply for stock tips. I ignored & deleted them, T-Mobile said I must have replied to confirm, so I simply referred to my detailed SMS history, which showed that I hadn't. They refunded the charges as a "courtesy". This has been my only shady experience in many years with T-Mobile, but I am very glad they are being called out.

 

[BlueDrake]

Except the 8888906150 BmStorm23918 is clearly from Shaboom Media and listed under your premium data..use some logic instead of some sensational journalism please!!

Excuse me but I believe the whole point was, people were charged for said services without signing up? Wireless isn't very well protected from all these outside sources, especially if the third parties are allowed to use company info. It comes down to an issue of, why they charge bogus things vs you being stupid and doing this yourself.

 

[ashram82]

Except the 8888906150 BmStorm23918 is clearly from Shaboom Media and listed under your premium data..use some logic instead of some sensational journalism please!!

Excuse me but I believe the whole point was, people were charged for said services without signing up? Wireless isn't very well protected from all these outside sources, especially if the third parties are allowed to use company info. It comes down to an issue of, why they charge bogus things vs you being stupid and doing this yourself.

So long as they go after AT&T, Verizon, Sprint, and all the others player than this is fine. They are all guilty of doing this because you or someone might of texted somebody for a horoscope or a free ring tone, and they will "small print" $9.99 or other premium service monthly recurring charges.

 

[Guest]

"Let's call this what it is... first, journalism bias at it's finest. This has nothing to do with the story and is just an attempt at riling up the reader and/or trashing T-Mo. But... that doesn't excuse what he said, which is inexcusable. People who use rape as a metaphor like this have no idea what it really means. Why not just say Verizon is like a disturbed teen with an assault rifle, and it's customers are the high-school bullies about to be put down? No taste, no class, no professionalism, and clearly no desire for new customers."

Legere is, and has always been, crass. As a former GC employee, I was amused by the un-carrier concept and thought it was a clever idea. It has been overshadowed by Legere building this cult of personality around himself as some kind of "rogue CEO" shaking up the industry. He's just a sleazy person, and this marketing ploy has given him free reign to show the world....

 

[amstech]

Verizon completely **** people out of their money and rip people off every day for their "godly" services, but hey atleast they do it with class.

 

[MalcolmTucker]

Let's call this what it is... first, journalism bias at it's finest. This has nothing to do with the story and is just an attempt at riling up the reader and/or trashing T-Mo. But... that doesn't excuse what he said, which is inexcusable. People who use rape as a metaphor like this have no idea what it really means. Why not just say Verizon is like a disturbed teen with an assault rifle, and it's customers are the high-school bullies about to be put down? No taste, no class, no professionalism, and clearly no desire for new customers.

Nothing wrong in my mind in reporting the news. I had T-Mobile for YEARS. Then, one day, I wised up, and got a Cricket Plan after AT&T bought them.

On Cricket, I get 5GB of data for $55. (includes a $5 discount for auto-pay with credit card). On T-Mobile for $50 I only had 500MB of data.

When I got a new iPhone, I paid $55 to get it unlocked, but it hasn't worked yet. So, to use a Cricket SIM card, it didn't need to be unlocked.

So the new Cricket/AT&T plans are a great value. It has the same coverage as AT&T... Meaning I don't have to drive 5 minutes to make a phone call anymore.

The New Cricket started selling unlimited GSM service on AT&T's network only 3 months ago.

 

[MattP]

Except the 8888906150 BmStorm23918 is clearly from Shaboom Media and listed under your premium data..use some logic instead of some sensational journalism please!!

Excuse me but I believe the whole point was, people were charged for said services without signing up? Wireless isn't very well protected from all these outside sources, especially if the third parties are allowed to use company info. It comes down to an issue of, why they charge bogus things vs you being stupid and doing this yourself.

So long as they go after AT&T, Verizon, Sprint, and all the others player than this is fine. They are all guilty of doing this because you or someone might of texted somebody for a horoscope or a free ring tone, and they will "small print" $9.99 or other premium service monthly recurring charges.

They absolutely all did it. I'm amused by people stating "I never sent a text for a ringtone or horoscope" when the day and time that the text was sent can be found. Granted, a lot of those companies were doing shady things running commercials with print so fine it could barely be read, that is not the fault of T-Mobile. When my parents were with Sprint they tried telling me that the charge was unfounded but when I pressed my mother she remembered texting for "joke of the day."

 

[cmbjive]

They absolutely all did it. I'm amused by people stating "I never sent a text for a ringtone or horoscope" when the day and time that the text was sent can be found. Granted, a lot of those companies were doing shady things running commercials with print so fine it could barely be read, that is not the fault of T-Mobile. When my parents were with Sprint they tried telling me that the charge was unfounded but when I pressed my mother she remembered texting for "joke of the day."

Indeed. When I took those calls I would always laugh silently at them. "I didn't authorize this charge!" Yeah, sure you didn't. I'm looking at your detailed text history and I see the text to 123Media confirming the charge.

T-Mobile or any of the other telcos don't just go around putting "strange charges" on your phone. However, I won't cut the telcos any slack: They should have nipped this in the bud with a lot of these companies years ago.

 

[mctommy]

T-Mobile ended premium text last year:
http://www.tmonews.com/2013/11/t-mobile-ending-premium-text-message-billing-in-order-to-fight-fraud/

 

[Guest]

Legere was CEO of Global Crossing as well - nuff said