T-Mobile accrued another $29 million for “cramming” refunds last quarter

android-Malware-subscription-premium-SMS-Services

If you’ve been following the story since late last year, you’ll be aware of T-Mobile’s premium SMS refunds. Initially, it made a move to cancel its ties with premium content providers in an effort to ensure its customers couldn’t accrue any unauthorized charges for jokes, horoscopes and trivia they don’t want. It set money aside to retroactively refund customers any charges.

In an SEC filing, T-Mo reveals that it set aside $24 million during the second quarter of this year, and an additional $29 million during the 3rd quarter. The second amount was accrued as a result of the FTC litigation earlier this year. The Federal Trade Commission alleged that T-Mobile’s premium charges were “bogus” and hidden in bills to make it unclear what the charges were for. A claim which T-Mo stated was unfounded. Both have since requested to be allowed time to settle the case out of court.

On July 1, 2014, the FTC filed a lawsuit alleging that T-Mobile allowed third-party merchants to include unauthorized premium SMS content charges on customer bills, and seeking restitution and changes in business practices (Federal Trade Commission v. T-Mobile USA, Inc., Case No. 2:14-cv-00967-JLR, W.D. Washington). This complaint did not seek a specified sum as monetary relief. T-Mobile is currently in settlement negotiations with the FTC, the FCC and the state Attorneys General. Based on this development, in addition to the revenue reduction recognized in the second quarter of 2014 in connection with the comprehensive refund program, T-Mobile has accrued an additional $29 million in the third quarter of 2014 for anticipated settlement payments.

In total, T-Mobile has set aside $53 million to deal with the settlement and for refunding charges to customers.

As a reminder, T-Mobile customers who believe they have unauthorized charges can request a free account summary, then ask for a refunds for each specific “bogus” charge. Or, alternatively, they can request a flat-rate $40 refund. You can head on over to T-MobileRefund.com to make a claim, or if you have questions, call 1 (855) 382-640 or email T-MobileRefund@gcginc.com.

Source: SEC
Via: WirelessWeek, Sun-Sentinel

Tags: , , , ,

  • skittle

    As you can see, Cram doesn’t pay.

    • John

      Cram pays TMo didn’t cram it hard enough :(

  • skywalkr2

    Used to have problems with this crap at Sprint, but fortunately have been able to not get this at TMO.

    • I never get thes, I use prepaid. Well, when Verizon bought Alltel I did. It’s always a good idea to call in and disable them, especially if you have kids.

  • JoeDaniel

    This pissed me off.. as someone who is in banking, I would bet anything that at least 25% of the money getting refunded to people is stuff they bought and forgot about… I used to use this service with t-mobile for purchases on the playstation store and now I can’t anymore, it’s too bad, I liked that option!

  • THE CONSUMERS WHO HAVE JOBS AND PAY BILLS DO NOT CARE…Use the Money towards your network T-Mobile. It’s ok if the subscribers don’t get $1.50 back in a refund check. It’s ok!….put the money to goo use. FTC. go CRAM yourself!

    • Android_God

      So T-Mobile acted in a shady fashion but somehow it’s the FTC’s fault? T-Mobile has committed the ultimate SHELL GAME by simply moving monthly costs from high priced service to overpriced phones. They have single handedly set back the idea of buying your phone and shopping for a network.

      • Fabian Cortez

        Huh? They’re selling you phones at 0% interest financing at MSRP.

        Sure they don’t purchase the phones at MSRP but at least you know how much the device costs.

        No high end smartphone costs $199.

        • philyew

          Documents revealed through the Apple v. Samsung litigation showed that TM (and the other carriers) were paying almost $450 per device for top of the line Samsung devices in 2012. If anything, that amount will have increased since then.

          http://allthingsd{dot}com/20120809/apple-vs-samsung-trial-forces-companies-to-open-up-the-books/

        • Fabian Cortez

          So what are you saying?

        • philyew

          Simply providing some hard numbers to support what I understand to be your point :-)

        • Fabian Cortez

          Oh ok.

        • philyew

          Year in, year out, we hear arguments suggesting that TM are making a fat profit from selling phones at MSRP, but the numbers submitted in the Samsung/Apple case indicate something different.

          When you deduct all the overhead costs that are associated with each device (e.g. marketing, logistics, retail overhead, support etc) from the margin between MSRP and the wholesale price indicated in that document, you are left with a surprisingly low profit margin.

        • Samsung has stated that they make more profit on feature phones than on smart phones. I don’t know if that’s because of bulk or margin per phone sold, though.

      • David March

        If you were really a god you’d probably be able to figure out how good the TMO billing actually is, but I do agree with you that big myke isn’t all there.

    • David March

      I have a nice job and pay bills and I care. Don’t steal money TMO and thanks for providing good oversight FTC. Get back on your meds big myke.

      • Hey, it takes one to know one, I guess. NO meds here, but nice try.

        • David March

          The first sentence doesn’t make sense, but don’t worry that isn’t surprising given what we’ve come to expect. The second sentence points to the problem. If you don’t get back on them, how are we going to have a rational conversation.

  • dayaram

    When is uncarrier 8.0 coming out???

    • Fabian Cortez

      Really?

    • bob90210

      This is uncarrier 8.0. It is to give back money that they should not have taken in the first place.

  • notyourbusiness

    I already got my $40 flat fee refund for this. However, I’m pretty sure they got more than $40 out of me for “premium charges.” I have no idea how long it was before I even noticed that on my bill.

  • bourgeois

    Never been charged, really don’t care.

    Something I do care about however was the disappearing T-Mobile signal as soon as I crossed the Pennsylvania border into West Virginia this pas week while I was on travel. I roamed on AT&T’s network the entire time I was in West Virginia. I couldn’t use google maps because my ridiculous 10 MB limit was used up streaming Pandora before I realized I was roaming.

    How is it I can have unlimited data abroad, but in the U.S. I max out at 10 MBs on someone else’s network? And what is up with not a single T-Mobile tower in the entire state of West Virginia, is someone at T-Mobile corporate annoyed with the weird WV accent?

    • tmo_rep

      Seriously dude, do some research. Im just gonna leave it at that.

      • bourgeois

        Research Complete:
        1. T-Mobile network non-existent in West Virginia, Montanta, North/South Dakota – TMONEWS – editorial-t-mobile-needs-to-focus-on-the-real-network-issue-the-large-swath-of-2g-only-markets 02-2012
        2. Unlimited International Data. Domestic roaming limited – T-mobile site.

        I love T-mobile. Great coverage and speed where I live. Awesome pricing. This past week however sucked.

        • David March

          I agree with what you’re saying, but if I’m travelling to a spot where I’m unsure of the coverage then I check. If it is all roaming, I contact TMO and confirm what I found and upgrade my roaming allotment for the days I’ll be travelling.

        • CalicoKJ

          How do you “upgrade my roaming allotment”? The only way I’ve been able to do so with my SO was to change his data plan from unlimited to a fixed GB. Not an option on my daughter’s phone unless I want to lose her grandfathered $20 unlimited plan. I’ve been told (and seen in my research as well) that you can’t just buy roaming data buckets. I’ve asked as the SO travels through MT frequently.

        • David March

          You probably can’t do it with a grandfathered unlimited plan. But with a current plan, I’ve upgraded my data on the regular plan to a higher allotment prorated over the days I’m travelling which in turn raises the roaming data to another tier. That is how I’ve done it in the past.

        • schweddyballz

          Yes if you add the more expensive plans up to 100$ data plan there are 3 tiers. 50mb, 100mb, and 200mb. None of it is really worth it unless you really need data and are domestically roaming

        • Brian Perez

          They can upgrade u it will just cost u like 15-25 dollars for 50 mb of extra data i have a grandfathered unlimited data plan and when I was with visiting northern Michigan I was able to get mine roaming data upgraded without losing my unlimited data planit’s all about asking them and hopefully you get a representative that’s more than kind enough to help you but I don’t think it should be a problem it wasn’t a problem for me or just make sure that you’re always connected to wifi best of luck to you

        • T-Mobile Cares

          We have data passes that you can purchased to compensate for traveling to areas such as roaming. Contact our Customer Care people and they should be able to add a data pass to your account.

        • Android_God

          Can I get a discount flight to India?

        • MastarPete

          3. ATT is likely gouging T-Mobile for roaming access, making unlimited domestic roaming impossibly overpriced to offer. Why else would ATT be upset about T-Mobile asking for clarification of roaming rates. – TMONEWS – att-unhappy-with-t-mobiles-attempts-at-clarifying-roaming-rates

          4. The EU has had laws to end price gouging since 2007 and recently passed legislation to eliminate roaming charges starting Dec, 15 2015. That’s part of why T-Mobile has been able to offer unlimited 2G data internationally, it’s reasonably priced. – Wikipedia – European_Union_roaming_regulations

          I’ve had T-Mobile for 13 years but haven’t needed to worry about data roaming for the past three. T-Mobile’s 1900mhz re-farm was a giant wake-up call. My family has always done road trips for vacation and I’ve come to realize that if you *think* you’ll want to have access to something while driving through the middle of farmland you’re better off NOT trying to rely on “The Cloud”. You’ll save yourself some frustration and headaches from lost data signal by just thinking ahead and pre-loading what you want to listen to. The USA is too huge to have any one network reliably cover every square inch of terrain, especially when the primary motivation for providing coverage is Profit.

    • bourgeois

      I had great coverage in Pittsburg and surrounding areas, though!

    • bob90210

      Never been to West Virginia, really don’t care.

      • AndyG

        ??

    • Aaron C

      It’s a lot of areas. I notice the 700Mhz T-Mobile spectrum map encompasses almost all of Massachusetts & NH. It’s a good thing, because once you get north of Holyoke, MA heading up 91 toward NH, it’s all barely-usable Edge from then on. No more music, no more Waze (which needs network access for communication), and sometimes you can’t even get a phone call or SMS through. I hope next summer on my White Mountains vacation to have some band 12 goodness in my travels.

      • dtam

        Would be nice…except for stupid WJAR in Providence that neuters Boston metro…

        • Aaron C

          Yeah, it looks like they’re dragging their heels. Most of the other stations have already applied for relocation. If WJAR wants to be difficult, it could be years before they move (until they’re forced to).

          At least Boston metro is mostly covered with LTE under the current (non-700Mhz) spectrum. I know that doesn’t help with building penetration…

        • dtam

          reviving an old convo…but TMO is moving WJAR. This should happen within 5 weeks of 4/23/15, so end of this month.

      • Mike Palomba

        By then all that edge should be LTE

        • Aaron C

          I hope so. MMmmmmm. 700Mhz long-distance LTE!

    • Chris

      It’s because abroad, T-mobile was able to worked out a deal with Carriers over there. Do you really think that their competition over here in US would allow T-mobile to roam on their network on pretty good terms?

    • TylerCameron

      No one lives in West Virginia. That’s why.

  • A T-Mobile User

    “Accrue”.

    I don’t think it means what you think it means. Rather, I don’t think it can be used the way you think it can be used.

  • steve1026

    Your link for the refund site is broken

    • bob90210

      That’s done on purpose so that Cam can keep all $53 million for himself.

      • Jay J. Blanco

        Lmaoo

  • Mike

    So what the hell is TMO doing? They swore up and down that they stopped this practice a year ago and swore that they were doubling down to seek those out that were due refunds. Legere showed richious indignation that these charges were bogus that TMO was the leader in the industry to stop this practice. Now we learn that people still. Are beiing crammed nearly 12 months later and the double down to proactively identify those due a refund has not been happening. Sounds like someone has been telling stories Mr. Legere or your staff is feeding you a BS story.

    • UMA_Fan

      This is about the cramming from before that has long since passed

  • supergirlk

    To be honest a lot of the 3rd party charges are valid and people just don’t want to pay for what they used or read what they are signing up for. Some of them are b.s. but most are legit charges. Grow up America and be responsible for your actions.

    • Nearmsp

      Not really. I was slammed for charges and T-mobile insisted I had clicked something. Hand in glove, T-Mobile made millions dividing the spoils with spam companies in the Caribbean.

    • notyourbusiness

      Sorry, but you don’t know what you’re talking about. I use zero 3rd party sites for stuff like ringtones, wallpapers, etc., yet I discovered sometime last year that I was being charged $10 per month for “premium services.” I immediately called T-Mobile and the customer service rep told me the name of the website this charge supposedly came from – and not only had I never downloaded anything from them, I also never heard of them. The rep said that it was possible I accidentally clicked on an ad while using a free app and that’s what caused it to be tacked onto my bill. What B.S. It’s fraud, plain and simple. Has nothing to do with anything “legit,” as you claim most of these charges are. I’m positive I’m owed more than that measly $40, too.

  • ExTmoUser

    I ended up doing the refund right before my contract was over and after I ended my contract my $40 were credit to my last bill even though when I ended the contract I was told my balance was paid and didnt own anything anymore. So now those $40 are being credit to a month of service that I didn’t even use!

  • T-Mobileused2bgood

    Classic T-Mobile. Terrible service and cramming unjustified fees.

  • trife

    I got a $40 credit for this and I never had any of those premium SMSs that I was aware of. TMO said they’d research it before approving the credit, so I’m assuming either they found some or didn’t even bother to look.

    Either way, I’ll take it.

    • ghan kjuh

      freeloader your what is destroying china