T-Mobile accused by FTC of adding millions worth of “bogus charges” to customer bills

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The Associated Press tweeted out a shock update just a few minutes ago, reporting that T-mobile has knowingly been billing its customers for hundreds of millions in bogus charges.

The FTC alleges that T-Mobile has been continuing to charge its customers for “premium” SMS subscriptions which – in some cases – were “bogus charges” that the customers never authorized in the first place. According to the FTC, T-Mo received somewhere between 35-40 percent of the total amount charged for these text subscriptions, which typically cost around $9.99 per month.

“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.”

Perhaps worse than the amount being charged is the allegation made that T-Mobile’s billing practices made it difficult for customers to see that they were being charged, and certainly couldn’t tell who was charging them. Bills – allegedly – weren’t showing that they were being charged by a third party, and didn’t show that it was for a recurring subscription.

“The heading under which the charges would be listed, “Premium Services,” could only be seen after clicking on a separate heading called “Use Charges.” Even after clicking, though, consumers still could not see the individual charges.”

The complaint also alleges that T-Mobile’s full phone bills, which can be longer than 50 pages, made it nearly impossible for consumers to find and understand third-party subscription charges. After looking past a “Summary” section as well as an “Account Service Detail” section, both of which described “Usage Charges” but did not itemize those charges, a consumer might then reach the section labeled “Premium Services,” where the crammed items would be listed.

This news comes not long after T-Mobile announced a program in which it would start repaying its customers for any fraudulent premium texts they were charged for. A move it indicated it would be making months earlier, in November last year. It also comes shortly after we found out that T-Mobile will be offering simpler billing for its customers to make them easier to understand and see charges broken down in an easy-to-find manner.

The FTC’s complaint, filed in the U.S. District Court for the Western District of Washington, seeks a court order to permanently prevent T-Mobile from adding this kind of charges to bills, and to refund customers affected. Something which T-Mobile has already stated – back in November – that it will be stopping.

We’ve reached out to T-Mobile for a comment on this and will update the post when we get one.

Source: MarketWatch

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  • OnlineRefugee

    Those who think there’s no merit to this case, think again. I assure you the government does not go after businesses unless there’s substance to the charges. The govt. is just like you or I, they don’t like to lose cases.

    If this case was a close call or questionable, the FTC would not have filed it.

    And charges are not filed until AFTER the govt. does a complete investigation, has thousands of complaints, and has the evidence to prove the case.

    Sidenote: Is there a company yet that has not said at the beginning of a case that “there’s no merit to the charges or the case.” (And by the way, so too are all felons in prison innocent, not a single convict committed the crime and are all wrongfully incarcerated.)

    T-Mobile, like other businesses, sought to take advantage of the SCOTUS gutting private class actions and litigation. Everything is now subject to individual arbitration. That means businesses can cheat consumers without being held accountable.

    It is now up to govt. agencies to go after businesses, since customers don’t have the time or inclination to go after a company like this over a $100 claim. Corporations can now pocket billions in stolen money and laugh all the way to the bank.

    For those who don’t know what I’m talking about, check out a case called “Concepcion v. AT&T Mobility.” That was the beginning of the end to consumers protecting themselves from activity like this.

    • Trust No One

      Cool Story. Just like we trusted govt to put our peoples best interest in foreign policy? I’m not siding with either side let them hash it out.

      From my personal experience I call if my bill looks unusually out of wack, I can’t recall in the past 5 years something like this happening to me. So based on that I’m waiting before I pass judgement.

  • OnlineRefugee

    Watch for the eventual headline: “T-Mobile settles FTC suit for $100 million, but says not an admission of fault, just wants to avoid the expense of litigation.”

  • A Guy

    I worked at TMO for about 6 months and these SMS things were a problem. If possible we would request the funds to refunded to the account. The problem with these is that it is not TMO cramming or slamming anyone with them. Kids get ahold of phones, People don’t read the fine print of what they are signing up for. These things happen. We would also block those services from the phone. Years ago when I was with Verizon I had a $400 cellphone bill because my wife had subscribed to horoscopes and text trivia. Each time it sent a text to her phone it charged us $10.

    However the consumer has to take some accountability into the things they download and utilize on their phones. So for TMO to be sued is pretty comical. I am pretty sure there will be a settlement. And John Doe will laugh him self to the bank with his 1.99 check.

  • tech916

    F you tmobile hope their is a class action. You charged me for bogus charges, You sell my phone numbers to Debt Collectors even though you claim I have been an excellent customer for 6 years.

  • OnlineRefugee

    About three years ago I ended my 8 year relationship with T-Mobile because they used a “bait and switch” scam on me. That was the last straw (see below for other incidents).

    Bait and Switch

    I had ordered two new phones, The then-new HTC One, something like that. To sell me on the idea of signing a new two year contract, they would give me the two HTC Ones for free. T-Mobile also agreed to $10 on each line for 5 GB data.

    In the afternoon I received a text message and e-mail confirming the deal. But buried in the message – I would be paying $25 for 5 GB data on each line.

    I called T-Mobile in the afternoon to talk about the inconsistency. I remember where I was when I called, standing outside a Target store. The CSR rudely said his records did not indicate the $10 deal. He said I must have heard wrong. Of course, having no proof, I was stuck, as the CSR well knew.

    The CSR’s tone was condescending, implying I was a liar, and making the whole thing up. He also implied I must be financially desperate for trying to work T-Mobile over for $10.

    Despite my being long-term loyal customer the CSR rudely refused to give me the $10 deal. The CSR thought I wouldn’t do anything about it. When I said to close the accounts he thought I was bluffing. He cavalierly responded “OK, I’ll close em for ya.” He didn’t try to save the account. (This was about the time that T-Mobile customer service started its rapid decline. Many people on the T-Mobile boards were telling about how CSRs were not making any effort whatsoever to retain accounts.)

    Impossible To Close Account

    Despite closing the accounts, the CSR lied about doing so. It actually took five days and five calls to finally get a supervisor to close down the two lines. (All I can figure is that T-Mobile’s quarterly numbers were due in about five days, and the CSRs were under orders to keeps accounts active until after the quarter ended, this so their numbers did not look so bad.)

    Or it could simply be that T-Mobile has petty, vindictive CSRs, which would be in line when an expose came out that certain T-Mobile customers were blacklisted. When those customers called they would not pick up the line, if talking to them, they would hang up the call mid sentence.

    MOBI TV – Evidence of Cramming

    A few years earlier, in 2010, I had an HTC HD2. I had tried out that Mobi TV, whatever it is called. I did not like it so I canceled before the 30 day trial period was up. Despite this, T-Mobile started charging me $10 monthly for the service. When I saw the charge on the bill I would call T-Mobile and each time they said they would cancel it, I got a $10 credit and all was well, or so I thought.

    Every two months for the next six months I had to call T-Mobile to again request they stop charging me tor Mobi TV. Each call they would (supposedly) remove the charge and I would get a $20 credit for two months service.

    IMO T-Mobile was cramming, what they are accused of here. To be sure, I assume many people were NOT like me, someone who would notice the charge on the bill. As it was, I called every couple months because I did not have time to deal with all this.

    And the $10 charge was exactly as alleged here, buried in the bill, something like on page six. And the bills were so confusing I had to look fairly close to notice the charge for services I was not using, and probably not available.

    Bottom Line

    Should a jury find for the Plaintiff FTC? Having experienced first hand T-Mobile’s bad acts, I’d vote yes if I was on that jury.

    After all desperate people do desperate things. T-Mobile numbers have always been
    dismal, so much so that it relies on trick and device to pick the pockets of customers at every turn, including phantom charges buried on page six of the bill, slamming, cramming, fraud, and even refusing to close accounts when requested by the customer.

    Just on delaying closing accounts how many extra millions does T-Mobile make by holding customers hostage.

    I assume the evidence will show T-Mobile is rotten to the core, masters at working every angle to fleece its customers.

    Also, if you search T-Mobile complaint in Google you will see thousands of hits and search results of people complaining about T-Mobile’s billing practices.

    Follow the money, follow the motive. For years T-Mobile was hurting, subscribers were leaving T-Mobile by the hundreds of thousands each quarter. That’s provides a strong motivation to cheat customers any which way it can.

    The current alleged wrongdoing is only an ice cube on top of the T-Mobile dishonesty iceberg. I hope that the FTC and U.S DOJ looks into all of T-Mobile’s conduct, not just the charges in this Complaint.

    I suspect these guys are dishonest as the day is long.

    P.S. I now use S… Talk prepaid (an MVNO carrier who uses AT&T towers), where I get 4G LTE 3 GB data and unlimited talk for $42 monthly. No contracts, no complicated bills, no cramming, absolutely no way to get cheated. (That’s why carriers like post-paid or complex monthly bills, carriers like T-Mobile can hide all their fraudulent conduct.

    • http://www.volkswagen.de/ Quailallstar

      Wow great write-up. Alot of your issues are news to me and sucks you had to go through all this bullshit. I’m also thinking of jumping ship after my July billing cycle is up and just using Aio (Criket) $55 for 5gigs or MetroPCS’s trully unlimited $60 (yes I know it’s still T-Mobile).

      • OnlineRefugee

        Thanks for the nice words.

        And pardon all for my grammar errors and misspellings. I did not proof my comment. Sometimes I post with reckless abandon.

        Quail… you should look into all the various prepaids. There’s quite a few companies now, each offering competitive terms.

        I suggest a GSM prepaid because that allows you to BYOP (bring your own phone). All you do is buy that carrier’s SIM, insert into your current phone, you are good to go.

        There’s a number of GSM prepaids offering great prices. Check out Straight Talk , H2O, Red Pocket, and as you mention, Cricket.

        An advantage of these prepaid carriers is bill simplicity. All of them don’t even provide a bill because there’s nothing to bill. There’s a monthly charge, that you can pay each month manually, or for a slight discount, get $2 to $3 off the bill.

        I love it because I HATE monthly going through 150 pages of billings, which is the total that I get each month from the various utilities, credt card companies, etc. Some people say “Well, this isn’t T-Mobile’s fault, you should be looking at your bill.” That sounds OK, until one realizes that there’s 100 pages + to review each month.

        The nation’s populace should not be required to expend 400 million hours monthly reviewing their bills. (200 million citizens x 2 hrs. each to review monthly bills, including inserts companies like to include to sneak in new terms and conditions.)

    • Dr Haroun Abbas

      You sound like you’re leaving out key facts and details. I declare and call BS.

  • Phil

    You would think FTC would be focusing on Sprints lies and 10.00 premium data charge
    That 10.00 kicked in right after wimax went live customer upgrading to compat device aka premium .
    90% of their customer base was receiving minus edge data speed. The out right lied feeding customers major network upgrades were in progress you would he covered soon enjoying wimax speed aka premium data.

  • Justin

    I was hit with a fraudulent charge. I got a text asking if I wanted to sign up for “Fit Tips” . Then 1 second later I got a new text thanking me for the subscription. Then 1 second after that I got a message telling me to get more sun.

    I called T-mobile and asked if I was charged and she told me there was a charge for $9.99. I asked her to cancel and not let the charge go through. I was told she could not reverse the charge but ask for the company to refund. She then blocked my ability to text ANY short number to stop this from happening again, which sucks because I cannot send any text to a legitimate dealer. I never got the refund and after 3 months of constantly calling they finally refunded my $9.99.

  • Andre Dionne

    About a year ago, one of my phone lines had a premium charge on it, which I noticed because the bill was $10 more than usual. Took a look at the bill, and I was able to see clear as day the company it came from without digging. Asked my friend who had the line if she had initiated it, she said no. So I called up T-Mobile and they said they could cancel it immediately and refund the money. By the next bill, my money was refunded and there were no more charges.

    I realize this is just one case, but I have had absolutely no problems with how T-Mobile’s billing or customer service handled this kind of thing.