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FTC Accuses T-Mobile of Pocketing Millions From Fraudulent Premium SMS Services

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The Federal Trade Commission (FTC) yesterday, filed a complaint against T-Mobile, accusing the wireless carrier of practicing “cramming,” or obscuring third-party premium SMS fees in hard-to-understand monthly bills.

The motion alleges that T-Mobile took a 30% to 40% cut of many fees and pocketed millions of dollars beginning in 2012, often failing or refusing to refund affected subscribers until last year in 2013. 

Unsurprisingly, T-Mobile CEO John Legere responded with a few choice words. Calling the FTC complaint “unfounded” and “misdirected.” He asserted that T-Mobile ceased billing premium SMS services last year and has been providing full refunds to customers. Legere placed much of the blame on bad actors, maintaining a few premium SMS providers acted irresponsibly.

Whoever is truly at fault, the proceedings are definitely a win for consumers hit by exorbitant and unexpected SMS fees.

Here’s hoping the matter is swiftly resolved.

Via: T-Mobile | Phone Scoop

 

  • Maria

    I’ve never had a problem w/ T-Mobile! In the past, I was under AT&T and Verizon, but their plans were just too expensive. I’ve been with T-mobile for more than 10 yrs and they always provided me with excellent customer service. Even offered data plans that saved me money! The other service providers are just upset because they don’t want to lower their service plans! But, take the T-mobile challenge that’s being offering right now. True to their word, which is why they’re still around! I don’t see the bigger guys doing anything about it! The FTC, to think that way, Shame on you!!! That’s called a HATER!!!!

  • FreedomCostsPlenty

    Looks like the Occupy stack of feces CEO really doesn’t care about the consumer after all. I’m sure his occupy sheep will defend him because he says all the right manipulative buzzwords.

  • Me

    I got yelled at twice today and a letter from a TMO attorney for harassment because I have to yell. 2g is dark ages now. I’m having second thoughts about Mr Legere. The company is being very poorly run lately

  • Me

    No. They don’t refund the money. What money. I just found out that I can’t even get alerts from my banks. I want a refund too. I can barely make calls. People can’t understand me. Where’s my refunds?

  • T Mobile Blows

    Haha alot of people here on this site said t mobile wouldn’t be screwing over customer like the other companies. Glad to see some of the start of their corrupt is starting to come to light.

  • Cappy America

    Those light in the loafers French never did like Americans.

    Back to ordering Freedom Fries.

    • John Davids

      Yeah, totally. Who needs your stinkin Revolutionary War naval blockade? Or your smelly Statue of Liberty.

      #murica

      • Berets R Ghey

        The revolutionary war? That was not too long ago. And you really struggled for a second example. Didnt ebven attempt a 3rd.

        F those lazy smelly cheese eating surrender monkeys. They are a worthless stain on the planet.

  • needa

    i had this happen to me on at&t. being on my mother’s bill at that time, i never saw the charges. and i for sure never accepted them. this went on for months and months. at&t would only refund the previous two months.
    just saying… this is not just a t-mo issue.

  • King of Nynex

    I was shocked to hear that the carrier who is #1 with drug dealers would be involved in sketchy business dealings.

    • needa

      lol. depends on the caliber of the drug dealer i guess. some of them want to be able to make and receive calls.

    • Daistaar

      I didn’t read anything about Boost Mobile here? Did you?

  • James Hill

    How’s that T-mobile service working out for you?

    • charesa39

      Great for me. Can’t beat their $30 plan. My service is better than it ever was during my 15 years with Verizon.

    • OreoMan

      Working well. My indoor signal at home and work is much better than it was on Verizon. I can actually use the 4G instead of WiFi, but since I can call on WiFi with TMo I just leave that on.

      • jasenm

        Unless you have a Nexus 5 like I did…that doesn’t support wifi calling. Loved that phone though.

  • https://www.heartbleedbug.com/ Intellectua1

    Couldn’t wait for DL to post this article for all the T-mobile stans. T-Mobile still sucks. Hate em.

  • NexusMan

    unCarierrrrrrrrrrrrrrrrrrrrrrrrrrrrrr! LOL. WIll all the Verizon is evil people now add T Mobile to that list too? LOL.

    • T4rd

      All carriers are evil, T-Mobile is just the least. I guarantee that if T-Mobile had Verizon’s network coverage, market share, and infrastructure, they would drop unlimited data so fast and be all over the shared data plans.

      • NexusMan

        I disagree on the “least” part, as evil is evil. But I absolutely agree otherwise. Of course T Mo is playing this “uncarrier” and we care about our customers while no one else cares about theirs BS because they are Last Place and have no money, coverage, and clout to truly compete any other way. And T Mobile supporters are gullible enough to buy into it. If they were a true competitor to Verizon and AT&T, they’d be just like any other carrier.

    • James

      No carrier is free of blame when it comes to this sort of stuff. However, I’d argue T-Mobile is better than most. At least I’m saving a whole lot more money, and receiving comparable service, than when I was with Verizon.

      • jasenm

        See I don’t get that. I left Verizon to try the T-Mobile etf deal. When the service was subpar for us we decided to go back to Verizon and guess what… I’m paying LESS then my plan at T-Mobile. We have two lines and a tablet and pay 140 a month. I was paying that alone for only two lines at T-Mobile.

        • JoshGroff

          I’m paying $90 for a phone, tablet, and the line access on both. If I wan’t obsessed with having the latest device, or bought sans payment plan, I could drop that by ~$40. (That’s with the 500MB hard cap data plan, which I never hit, and 1GB of tablet data.)

        • jimt

          What plans did you have at Tmo versus the new Verizon plan. I’m thinking the Tmo plan was unlimited everything and the Verizon was tiered data. Are you comparing equal plans?

          • AngryBadger

            Yes, you are correct. Verizon no longer does unlimited data. He must be juggling things around (no insurance, lowest data package, employee discount of some sort).

          • jasenm

            I had a three gig plan at tmo and a 2gb plan at verizon, other then that no differences.

          • jimt

            Two lines with 3 gig at Tmo is $100. How do you get to more than $140?

          • jasenm

            I was paying for our phones as well… two N5’s

          • AngryBadger

            That explains it. I do not like how they incorporate the device payment into the monthly bill. I would rather have a completely separate bill for that. I payed off my N5’s early and it was a head ache w/ the way they credit the bill etc. Do you use verizon’s payment plan?

          • jasenm

            Nope. I just got us two Moto X’s on two year agreements. I was with Verizon for 15 years before I tried the ETF deal with TMO so I guess I am just use to the “new every two” plan lol. Also, Verizon waved all our activation fees cause we came back. I was pleasantly surprised tbh.

          • jimt

            I would have to say that if you included two new Verizon phones on to your Verizon bill it would have been more than the Tmo bill assuming you got Verizon phones of equal cost of N5’s.

          • AngryBadger

            Odd.. I pay about 127 after taxes/discounts (w/o discount I would be paying around your verizon price now) for two lines unlimited talk, text, data plus a tablet with 1GB data… the only thing not unlimited is my tablet but I can hotspot for 5GB w/ my phone or use wifi…

        • Carlton Crasher

          Unlimited means nothing without service eh?

          • jasenm

            Exactly.

        • SkyCode

          You need to remember
          that once your phones are payed off your bill for Tmo goes down

          • jasenm

            IF you want to keep those phones. I’m not ashamed to admit I like the newest tech so for me, I’d always be paying for a phone.

      • NexusMan

        Luckily for you, I guess you weren’t swindled out of those SMS fees. I think the story points out everyone’s experience on TMobile is not as rosy as yours.

        • jimt

          Even if they ripped the extra $10 it’s still cheaper than Verizon. They all can get that mony back, anyway.

          • NexusMan

            Its cheaper because its cheaper (meaning the product). LOL. You act as if T Mo and Verizon are even remotely on the same level. Taco Bell is also cheaper than a 4 course meal at a 5 star restaurant.

          • jimt

            I guess it just depends where you live. I have a friend in Vermont that can only use At&t, only signal available. If all you can get is Verizon I feel your pain. Tmo needs more coverage but where they have it Verizon is at a loss.

      • NexusMan

        Also, luckily for you, you’re receiving “comparable service” to Verizon because NO ONE I know is.

        • jasenm

          This. I live in the 5th largest CITY in California. A simple Google search will tell you where I live lol. Even being in a highly populated area I RARELY saw 4g service. I spend a lot of time in the foothills and mountains around us and my Nexus 5 would laugh in my face the second I got out of city limits. I called my wife to wish her a Happy Anniversary once from the top of Mt. Whitney on my Verizon network. True Story.

          • NexusMan

            I don’t doubt you. But my point was, where I am, T Mo is horrible. Additionally, Verizon’s service is better in more parts of the country than T Mo is. T Mo simply does not have the footprint and resources Verizon does. Also, keep in mind, Verizon’s service, whenever you had it, has continually and continues to improve.

        • Beauregard Stauffer

          In Boise I get great service with T-Mobile LTE.
          I guess it just matters where you are.

          • NexusMan

            Absolutely. But my point is Verizon happens to be great in more places where “you are.”

    • Christopher Bement

      This man clearly read the article.

      • MJ

        This “article” does not give much info. I read more about this yesterday on non-mobile sites. My understanding is that even though TMO knew about this scamming going on, they did not do much about it and continued to charge people the fees. Even though people were calling up and complaining, they might have removed the caller’s charges, but let it continue for everyone else. While other carries banned this BS a year or 2 ago, TMO continued to allow it to happen while pocketing a nice cut.

      • NexusMan

        Actually, I did. I also read the story when it broke yesterday. And read John Legere’s denial. T Mobile is denying any wrongdoing just as Verizon always does, so my point is, what’s the difference?

    • Ryan Chapman

      Even with the faulty charges, it’s still coming in significantly cheaper than Verizon.

      • NexusMan

        Says a man who doesn’t have the faulty charges.

        • Ryan Chapman

          I actually have Verizon, but I’m switching in a few weeks when LG G3 comes to T-mobile.

          • jasenm

            DON’T DO IT!!!

  • antwonw

    What does “Premium SMS” mean anyways?

    • guest

      Horoscope monthly or weekly texts. Those commercials for free ringtones or love calculator then bill you 9.99 a month.

      • Guy Pierce

        And I’m pretty sure you had to reply to the text “Yes or Stop” to continue/or stop receiving them. Which in turn would have stopped the billing. Looking less like fraudulent charges but rather stupid people is to blame here.

  • jasenm

    I usually use DL for all the current news but this is yesterdays news. Other then that, I had left Verizon for Tmo but came right back due to the service. Glad I did.

    • MJ

      I was thinking the same thing. I read about this on a few different sites yesterday and kept checking DL, but never saw anything. I was looking forward to reading all the comments from the TMO fanboys saying ya but TMO is cheaper and oh ya VZW is evil.

      • jasenm

        You nailed it my friend.

  • http://www.about.me/kendallseabury Kendall Seabury

    “Legere placed much of the blame on bad actors, maintaining a few premium SMS providers acted irresponsibly.”

    Is their any use for premium SMS services?

    • Christopher Bement

      If you want 10$ monthly horoscopes, sure.

    • Josh

      What boggles my mind is that his company had to set up contract agreements with these “bad players” and he still won’t admit T-Mobile has some culpability. At VZW, if you have psms charges, csrs are able to waive a full year back if you notice psms charges on your account that shouldn’t be there. Source: I work for vzw as a csr.

  • http://www.jaxidian.org/update teh Jax

    What exactly is the “win for consumers” here? T-Mobile already is *proactively* refunding all of these $$s to customers. What more do you want?

    http://newsroom.t-mobile.com/news/t-mobile-announces-new-program-related-to-premium-sms-charges.htm

    • Carlos Lopez

      There is no win for customers its just the gov trying to take its cut

      • Mark

        I think its more verizon and atat making the people they have in their pocket report this non story, as if the things verizon has done for example receiving billions to build internet infrastructure and not doing it, is not more news worthy.

    • NeverAgainonT-mo

      I was a customer who was screwed by this policy.

      I asked t-mobile about my issues with their text messaging and they persuaded to move to a new service, at the time, which gave me unlimited text messages through their month to month program. But I had to pay to break my contract and did. A month later my phone broke and they would not cover it 11 months in under a 12 month warranty when it was a software problem on my sony device. I left t-mo and ported to Verizon. 3 months later they sent me an ETF for $300 even though I paid to break my contract under their CS Rep recommendation and was on a Month to Month plan. I never paid on principle.

      Screw T-Mo

      • http://www.jaxidian.org/update teh Jax

        Sounds like some sales people screwed you pretty badly. I *PROMISE*, pretty much any company that sells will have sales people that will screw you pretty badly in hopes you never catch one. T-Mobile is no exception here.

        I suggest you try to get T-Mobile to remove those charges from your name (and they likely will). Otherwise, this will likely bite you hard in the ass. And the longer you wait, the worse it’ll be.

      • Ryan Chapman

        I did the same thing out of “principle” to ATT when I was in my early 20’s… in the long run it was me who was taught a lesson, because the marks on my credit report for the next decade were more of a impact than paying the couple hundred bucks.

    • Pepe Le Pew

      Where’s my refund? They should not have taken it in the first place. I doubt if they did not get caught there would probably be no refunds. Never trust the French. Quit supporting bad actions.

      • See ya in court

        Looking for class action attorneys. Someone will pay and pay big! Of course the lawyers will probably get $100 mil and the subscribers with get a $5 coupon.

    • Hmmm

      Refunding? Really? I thought they denied doing anything wrong yesterday? Someone lying before or now?

      • jabarri2

        they said they didn’t do anything on purpose and for the accident they’re paying

        • LeDo

          Well if they said it was an accident it must have been. A multi hundred million dollar accident. Sucker.

          • AnettaGriffinynu

            My Uncle
            Joshua just got an almost new white Kia Rio Hatchback only from working
            part-time off a home computer. try this R­e­x­1­0­.­C­O­M­