In what might be the “Uncarrier’s” worst blunder in years, T-Mobile is being sued by the Federal Trade Commission after it was discovered that the provider has allegedly been placing bogus charges on customers’ phone bills for “premium” SMS texting subscriptions, which in many cases were never authorized by the subscriber. It is estimated that T-Mobile made hundreds of millions of dollars as a result of this unsavory practice.
According to the FTC, T-Mobile received anywhere from 35%-40% of the total amount charged to customers for unwanted subscriptions to “flirting tips, horoscope information or celebrity gossip that typically cost $9.99 per month.” T-Mobile apparently continued to collect its percentage years after the fraudulent charges were discovered.
“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.”
As the FTC explains it, “cramming” is the practice of placing charges from third-party sources on a subscriber’s bill without their consent (or knowledge, as is often the case). The charges were allegedly difficult to find as well, requiring T-Mobile subscribers to comb through their bills online, click through multiple links and even then the charges wouldn’t be listed separately, just grouped together under the banner “Premium Services.”
We’re anxiously awaiting a response from Legere and T-Mobile.
UPDATE: T-Mobile is hitting back at the FTC and it says that the charges filed against the company “unfounded and without merit.” Specifically, T-Mobile says that it stopped the billing for “premium” services last year and that it’s “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 also said that bill cramming issues are something that has affected the entire industry and isn’t something that only T-Mobile should be singled out for.