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FTC Says T-Mobile Made Hundreds of Millions From Bogus SMS Charges

Soulskill posted about 4 months ago | from the joke-of-the-day-only-$7.95 dept.

Communications 110

An anonymous reader writes "Today the FTC filed a complaint (PDF) against T-Mobile USA, alleging the carrier made hundreds of millions of dollars from bogus charges placed on customers' bills for unauthorized SMS services. "The FTC alleges that T-Mobile received anywhere from 35 to 40 percent of the total amount charged to consumers for subscriptions for content such as flirting tips, horoscope information or celebrity gossip that typically cost $9.99 per month. According to the FTC's complaint, T-Mobile in some cases continued to bill its customers for these services offered by scammers years after becoming aware of signs that the charges were fraudulent." FTC chairwoman Edith Ramirez said, "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. 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." According to the complaint, T-Mobile also made it hard for customers to figure out they were being billed for these services, and failed to provide refunds when customers complained." Here's T-Mobile's response.

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T-Mobile's Reponse (4, Informative)

darkain (749283) | about 4 months ago | (#47363975)

For those not clicking links, this is what T-Mobile had to say about this:

We have seen the complaint filed today by the FTC and find it to be unfounded and without merit. In fact T-Mobile stopped billing for these Premium SMS services last year and 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 is fighting harder than any of the carriers to change the way the wireless industry operates and 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.

As the Un-carrier, we believe that customers should only pay for what they want and what they sign up for. We exited this business late last year, and announced an aggressive program to take care of customers and we are disappointed that the FTC has instead chosen to file this sensationalized legal action. We are the first to take action for the consumer and I am calling for the entire industry to do the same.

This is about doing what is right for consumers and we put in place procedures to protect our customers from unauthorized charges. Unfortunately, not all of these third party providers acted responsibly—an issue the entire industry faced. We believe those providers should be held accountable, and the FTC’s lawsuit seeking to hold T-Mobile responsible for their acts is not only factually and legally unfounded, but also misdirected.

-- John Legere, CEO of T-Mobile USA

Re:T-Mobile's Reponse (4, Informative)

St.Creed (853824) | about 4 months ago | (#47364053)

Given the FTC complaint, if the statements made there are true T-mobile's going to be paying a lot of money this year: The FTC claims they made it impossible for the customer to detect the fraud in the first place, ignored all warning signs from those that managed to detect it anyway, then did not provide full refunds in all cases but partial at best, none at worst - and told those customers to deal with the scammers themselves while failing to provide the contact details they had.

If these things can be proven (should be pretty easy, the accusations are highly specific), T-mobile is looking at a pretty hefty class action suit.

Re:T-Mobile's Reponse (2)

Lodlaiden (2767969) | about 4 months ago | (#47364249)

T-Mobile provides my cell service. On a couple occassions I have had to call and get something redacted from my bill. The CSRs were very helpful with getting these items removed and they were listed as full refunds. I also check my bill every month before I pay it, and I know what the amount is supposed to be.

Bills that can be dynamic in nature should not be set up on autopay with no notifications.

Re:T-Mobile's Reponse (2)

Albanach (527650) | about 4 months ago | (#47365507)

There's also no indication that other carriers are immune from this problem; and unlike t-mobile, other carriers are still collecting these charges.

Re:T-Mobile's Reponse (0)

Anonymous Coward | about 4 months ago | (#47364305)

Given the FTC complaint, if the statements made there are true T-mobile's going to be paying a lot of money this year: The FTC claims they made it impossible for the customer to detect the fraud in the first place, ignored all warning signs from those that managed to detect it anyway, then did not provide full refunds in all cases but partial at best, none at worst - and told those customers to deal with the scammers themselves while failing to provide the contact details they had.

If these things can be proven (should be pretty easy, the accusations are highly specific), T-mobile is looking at a pretty hefty class action suit.

I'd be very interested to see the details myself. I had no end of problems with just about every carrier except T-Mobile, and once I joined the un-carrier program (aka simple choice), I've had a completely *constant* bill - every month the bill is within pennies of the previous month and broke down very simply into (phone loan payments) + (basic plan for each line) + (options like more data) + (fees/taxes). Compared to AT&T that repeatedly got my wife's phone on data overage on the 27th day of the billing cycle, or Verizon who still dinged me on overage for minutes (how 20th century) - such a constant, easily audit-able bill is ... a source of great calm in my busy and stressful life.

Re:T-Mobile's Reponse (4, Insightful)

Intron (870560) | about 4 months ago | (#47365701)

Astroturf is on sale this week at Home Depot.

Re:T-Mobile's Reponse (0)

Anonymous Coward | about 4 months ago | (#47368031)

Why buy it when you can get it in bulk for free here?

Re:T-Mobile's Reponse (1)

geekoid (135745) | about 4 months ago | (#47364921)

All I can say is that ion my case, they refunded my money quickly and easily.

Given the complaint... (0)

Anonymous Coward | about 4 months ago | (#47365617)

Given the complaint, it's clear that AT&T and Verizon are threatened and their bureaucrats are performing as directed.

Re:T-Mobile's Reponse (0)

Anonymous Coward | about 4 months ago | (#47368789)

...must only be on contract, as I've been on t-mo for severals now(monthly) and have sent SMS to canada and used phone/data in canada. I just paid the usurous rates on both, they were necessary for a financial transaction and I phailed to purchase a sim/temp block from a canadian carrier... choices turned out to be almost as bad as in the US...

Re:T-Mobile's Reponse (0)

Anonymous Coward | about 4 months ago | (#47364345)

T-mobile has to say this, even if it's not true. That's just the nature of a publicly traded company.

They all operate this way. Say one thing with their public face, effectively operate in another.

How? Establish an internal policy that creates an incentive to rip off customers. Unrealistic deadlines, goals. Bonuses for performance metrics. Force your underlings to do underhanded things in order to stay employed. Craft your auditing structure to overlook things that are supposedly against your publicly stated policy.

When the shit hits the fan the company can then claim that the activity was against their policy, and that all the bad things happened were do to a few bad actors that are being punished. Notice how this is the story EVERY time? It's not an accident.

Re:T-Mobile's Reponse (-1, Flamebait)

barone marsetti (3690201) | about 4 months ago | (#47366735)

that is why murder is the only answer. you start from the people in the board of directors, and if they are too well protected you hit their families. they must suffer, torture before murder is ok. you video everything. you put it up on the web as a lesson to the others. see how they react fast.

Re:T-Mobile's Reponse (-1, Offtopic)

Numeena Kaneena (3726815) | about 4 months ago | (#47364385)

my neighbor's step-sister brought home $20864 a week ago. she has been making cash on the internet and bought a $519900 home. All she did was get lucky and apply the advice exposed on this link MAX43.

Re:T-Mobile's Reponse (0)

Anonymous Coward | about 4 months ago | (#47365143)

Web cam whore by any chance?

Re:T-Mobile's Reponse (4, Insightful)

Karma Sucks (127136) | about 4 months ago | (#47364587)

I'm going to go ahead and surmise that other carriers are behind this attack. What else explains the FTC not going after AT&T and Verizon for equally bad and worse stuff? T-Mobile has explicitly halted this practice.

Re:T-Mobile's Reponse (1)

jandrese (485) | about 4 months ago | (#47365351)

I did think it was weird that T-Mo was the one getting slammed for this when of the three carriers I've had, they were by far the best at handling it. AT&T and Verizon were way worse about having those stupid things appear and making them difficult to remove.

Re:T-Mobile's Reponse (0)

Aighearach (97333) | about 4 months ago | (#47366929)

I'm not sure how it is you feel that other carriers handled better for you the cases of other customers being ripped off that is accused by the government.

It is almost as if you're too old to know what an individual is, or that you are one. Or that you not being robbed tells you nothing about who robbed somebody else.

"Your honor, that man is innocent, why I was alive at the same moment as the victim, and that man didn't rob me."

Re:T-Mobile's Reponse (1)

nine-times (778537) | about 4 months ago | (#47367997)

I feel like I'm being a little paranoid, but I had the same thought. And after all the NSA revelations and whatnot, I feel like paranoia is justified.

It's an industry that has always tacked on weird semi-fraudulent charges to your bill. The industry has always tried to hide what you're actually being charged for, advertised different prices than what you're actually charged, charged you for add-on services without consent, and charged for unexpected overages without warning. Meanwhile, T-Mobile has been shaking up the industry with simpler billing, making their charges more clear, and doing away with overages. Why would the FTC be going after them specifically?

Re:T-Mobile's Reponse (2)

Quirkz (1206400) | about 4 months ago | (#47368381)

Listening to this piece on NPR today I was reminded of the 90's, and all the crazy abusive things phone companies did then. Before cellular really hit it big, long-distance calling was contracted separately from but billed through your local phone company. There was a huge competition between long-distance companies. They would not only call you constantly trying to get you to switch, but nefarious activities were common. Once a year at least I'd open up my phone bill and discover I'd been switched to a new long-distance company without my authorization (they called it "slamming" back then), usually with some terrible rate or unintuitive "evenings and weekends" hours, so that what should have been a $20 charge for a few calls was now $50. It was almost impossible to prove you didn't authorize the change, and since the billing went through another company disputing the charges was incredibly difficult. That plus hard to read bills, fishy and/or vaguely labeled charges, and some surprise or another nearly every single month.

Today's news just reminded me that even if it's twenty years later and there's been a huge transition from landline to cellular, in the background nothing has really changed.

Re:T-Mobile's Reponse (4, Informative)

LordKronos (470910) | about 4 months ago | (#47364709)

I have to say, my experience with these bogus charges supports t-mobiles claims. About 3-4 years back, my wife somehow got signed up for some bogus service that was charging $10 per month. I didn't notice it until the 3rd bill. I called up t-mobile and they refunded the entire amount with no hassle. Furthermore, since my wife never uses any of those subscription services at all, they even offered to put a block on her account so she couldn't be re-subscribed.

That was years ago, and we haven't had any more problems. I had even forgotten all about it, but a few weeks ago I found out that block is still in place. We tried to sign up for a free text message subscription with Target so that we could get a $5 coupon they were offering. Tmobile automatically rejected our signup attempt, indicating that the service is blocked.

That said, I do have to nitpick one thing in t-mobile's statement:

In fact T-Mobile...launched a proactive program to provide full refunds for any customer that feels that they were charged for something they did not want

That sounds more reactive than proactive.

Re:T-Mobile's Reponse (0)

Anonymous Coward | about 4 months ago | (#47365005)

Not if they mean they acted prior to the FTC lawsuit. That would then be proactive as it wasn't mandated by the FTC/government.

Re:T-Mobile's Reponse (2)

NoZart (961808) | about 4 months ago | (#47366641)

Here in Austria, t_mobile is not that angel it's made out to be. Stuff like them trying to charge me for some SIM card related service, although my bill clearly has some SIM card service charge (which everyone on a contract gets to pay).

For me, T-Mobile acts a lot like "lets just rip em off, and the few people that actually control their bills (and complain) get refunded, some explanation about errors in the system and flagged for "no more rip offs". Bonus: these people will market our "sincerity" for us.

Re:T-Mobile's Reponse (1)

Aighearach (97333) | about 4 months ago | (#47366933)

So your experience is that of the 1 time t-mobile helped a company rip you off, they refunded the charges, therefore the percent of customers who didn't get a refund must be different than accused by the government.

I really can't see how that would follow. Your experience validates half the accusation, and they're not accused of never refunding anybody, only of not refunding a bunch of specific people... who really didn't get refunds.

Re:T-Mobile's Reponse (2)

LordKronos (470910) | about 4 months ago | (#47367915)

So your experience is that of the 1 time t-mobile helped a company rip you off, they refunded the charges, therefore the percent of customers who didn't get a refund must be different than accused by the government.

I really can't see how that would follow. Your experience validates half the accusation, and they're not accused of never refunding anybody, only of not refunding a bunch of specific people... who really didn't get refunds.

You need to work on your reading comprehension. Did I say any of the stuff you seem to be suggesting I did? No, I only said "my experience with these bogus charges supports t-mobiles claims". That's just me providing my data point. Others in this discussion will do the same. When we have a bunch of them, we can read them all and draw our own conclusions as to whether we believe the accusations are accurate or not.

Re:T-Mobile's Reponse (0)

Anonymous Coward | about 4 months ago | (#47368425)

"Proactive" in the sense that they anticipated customers' preferences and proactively trained their CSRs and put policies in place to handle such claims/complaints. As opposed to setting up a separate, low-budget, overworked, overloaded department that requires 5 escalations and 100 hours on phone from customers before you can even talk to someone who knows what he is doing, and that too after fear of a class-action or, even worse, compelled by court ruling.

Re:T-Mobile's Reponse (1)

stealth_finger (1809752) | about 4 months ago | (#47366905)

For those not clicking links, this is what T-Mobile had to say about this:

Blah blah blah, unfounded allegations, blah blah blah, customer first, blah blah blah, we're totally innocent, blah blah blah release the lawyers, blah blah blah, join our network.

-- John Legere, CEO of T-Mobile USA

It was SO wrong, he had to say it twice (-1)

Anonymous Coward | about 4 months ago | (#47364007)

And in case you didn't understand it:

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.

Re:It was SO wrong, he had to say it twice (1)

AaronLS (1804210) | about 4 months ago | (#47364291)

Was it 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?

Re: It was SO wrong, he had to say it twice (0)

Anonymous Coward | about 4 months ago | (#47364321)

I think 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. Also I think 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.

Re:It was SO wrong, he had to say it twice (0)

Anonymous Coward | about 4 months ago | (#47364507)

The article by the FTC [ftc.gov] did not have the statement twice. So the error of a repeated sentence (which may be a sentence that was wroth repeating!) was not Edith Ramirez's, but did show up on Slashdot.

So... (3, Insightful)

fuzzyfuzzyfungus (1223518) | about 4 months ago | (#47364031)

I'm pretty sure that "T-Mobile USA, Inc." didn't actually do much of anything by itself, being a legal and accounting entity and all.

Any word on who actually directed, authorized, permitted, etc. this little plan, and why they aren't facing a raft of fraud charges?

Re:So... (-1)

Anonymous Coward | about 4 months ago | (#47364109)

You're stupid and modded accordedly

Re:So... (0)

Anonymous Coward | about 4 months ago | (#47364207)

No YOUR stupid cause you cant even spell "acordingly"

Re:So... (0)

Anonymous Coward | about 4 months ago | (#47364277)

And YOU'RE stupid because ... well, do I even have to point it out?

Re:So... (1)

war4peace (1628283) | about 4 months ago | (#47364441)

I guess a whooosh is in order.

Re:So... (0)

Anonymous Coward | about 4 months ago | (#47364485)

Its not necesary

Deja vu (1)

Anonymous Coward | about 4 months ago | (#47364033)

This similar to the case of Google profiting from illegal ads. Personally I think the complaint should be sent to questionable subscription service rather than shoot the messenger.

Re:Deja vu (2, Insightful)

fuzzyfuzzyfungus (1223518) | about 4 months ago | (#47364063)

This similar to the case of Google profiting from illegal ads. Personally I think the complaint should be sent to questionable subscription service rather than shoot the messenger.

When the 'messenger' is the one who hides the charge and collects the proceeds of the fraud(taking a cut), you bloody well should shoot him. Then shoot whoever he was working with, of course; but no need to choose.

Re:Deja vu (0)

Anonymous Coward | about 4 months ago | (#47364797)

This similar to the case of Google profiting from illegal ads. Personally I think the complaint should be sent to questionable subscription service rather than shoot the messenger.

When the 'messenger' is the one who hides the charge and collects the proceeds of the fraud(taking a cut), you bloody well should shoot him. Then shoot whoever he was working with, of course; but no need to choose.

An allegation has been made. Let's see if the facts support the claims. Unless you want to go back to mob-justice, of course.

Re:Deja vu (1)

geekoid (135745) | about 4 months ago | (#47364929)

Except I find it hard to believe T-Mobile hid anything.

Re:Deja vu (3, Interesting)

Aighearach (97333) | about 4 months ago | (#47366961)

Duh, you didn't read the story, so of course you don't believe they hid anything. You probably don't even know what they're accused of hiding, and maybe not even that they are accused of hiding anything.

The filing linked not only accuses them of hiding the charges, they actually lie about the nature of the charges and instead of listing them as 3rd party charges, they hide them under "Use charges" with no breakout for 3rd party services on the first screen... or even on the click-through screen! You have to find the second hidden click-through, with still nothing listing 3rd party charges.

They're also accused of actually collecting a higher percentage cut... of the subscription services with the highest refund rates! So they clearly detected that those were scams, and instead of dropping the services, they demanded a larger cut. That is a substantial allegation, and it is very hard to come up with an innocent explanation for that difference in their own rates.

They're also accused of burying even their basic permission to charge for 3rd party services in the fine print. That is fine for the details of an agreement, but when a substantial part of the basic relationship is buried there, those provisions are probably not valid. Being bound to whatever the details said is very different than having not been clearly informed of the basic nature of the contract. And the contract is not a CC contract, it is a contract for specific telecommunications services.

Re:Deja vu (0)

Anonymous Coward | about 4 months ago | (#47364081)

The very worst are those illegal people.

T-Mobiles been the best carrier in this regard.... (4, Interesting)

Anonymous Coward | about 4 months ago | (#47364041)

Maybe its got something to do with the fact they offer and offered a variety of pre-paid plans that kept such issues to a minimum for me, but I remember my parents having tons of trouble with Verizon's billing practices. Every month they would be in quibbling over the charges until finally they had them disable SMS altogether. Never have I had an issue with T-Mobile.

Re:T-Mobiles been the best carrier in this regard. (0)

Anonymous Coward | about 4 months ago | (#47364173)

I wonder if the FTC made a typo and wrote "T-Mobile USA" in the complaint when in fact they intended to write "All carriers except T-Mobile USA"

It could also be the case that this complaint was brought at the behest of all carriers except T-Mobile.

Soltion is Prison Time (0)

Anonymous Coward | about 4 months ago | (#47364061)

Not just fines. It's called THEFT!

Generic revenge on phone companies (0)

Anonymous Coward | about 4 months ago | (#47364213)

There is a way to get revenge on phone companies:

1. Get a (cheap/used) phone registered to a fake name. (Illegal, but revenge usually is)
2. Call the most expensive services, continously.
  - This racks up a huge bill
  - The owners of the services are paid in a timely manner, directly from the phone company
3. Never pay the huge bill, phone company's loss! No need to pay, thanks to the fake name. Get rid of the phone, of course.

This is just revenge, you won't get money back. (Unless you operate those 'expensive services' yourself. But that is risky, they will always suspect the service owner.)

Re:Generic revenge on phone companies (1)

crashumbc (1221174) | about 4 months ago | (#47364347)

You know, they don't care? Like the insurance companies, credit card companies, etc, their scam is perfect. They just write off the loss and charge their other customers more...

Re:Generic revenge on phone companies (1)

the eric conspiracy (20178) | about 4 months ago | (#47364461)

Writing off a loss generally doesn't do much for you. It might save you 30% of the charge or so.

Insurance companies have a better deal because their business often involves re-insurance, that is off-loading their liabilities to pools.

The best of all is credit cards. They charge fees to merchants to cover the losses. The merchants then bake the fees into the retail price which people pay regardless of whether or not they use the card.

So no, T-Mobile isn't quite in the same league as insurance and credit cards.

Re: Generic revenge on phone companies (0)

Anonymous Coward | about 4 months ago | (#47366881)

Where is this mystical place that hands out used phones with an apparently free contract? You might have been able to do this 10 years ago but phone companies wised up and put you through all sorts of checks so this doesn't happen

it's wrong... (4, Funny)

alphatel (1450715) | about 4 months ago | (#47364131)

FTC chairwoman Edith Ramirez said, "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. 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."

T-Mobile replied "It's wrong for the FCC to call us fraudulent, twice."

Edith Ramirez having a stroke? (0)

Anonymous Coward | about 4 months ago | (#47364133)

Or is it the editors?

Huh, I had that problem with AT&T... (1)

seebs (15766) | about 4 months ago | (#47364135)

But never with T-mobile. AT&T did indeed allow third parties to start charging us without permission, then made it a fair amount of hassle (from my point of view, anyway) to cancel the services which we never requested. Never had a problem on any of our t-mobile lines.

Re:Huh, I had that problem with AT&T... (1)

Anonymous Coward | about 4 months ago | (#47364475)

I've had ATT charge me for data services on a phone which had no data capabilities.

Re:Huh, I had that problem with AT&T... (2)

jrumney (197329) | about 4 months ago | (#47365199)

I had the same experience with Vodafone UK. Eventually I got a refund, but only after I asked "is this call being recorded?" after demonstrating to the customer service rep that they had no evidence whatsoever of 1) me subscribing to the premium SMS spamming service or 2) that the T&Cs for premium SMS services were being complied with by the scammer. They also informed me at the end of the call about the STOP ALL message, which at that time (about 10 years ago) was not public knowledge, and which they could have told me at the start of the call instead of telling me to contact the company I'd subscribed from - and no they can't tell me who owns that number due to privacy restrictions.

If this flys... (0)

nurb432 (527695) | about 4 months ago | (#47364169)

Can we sue every ISP on the earth for allowing SPAM thru? Be it email, video ads, etc..

Re:If this flys... (1)

Anguirel (58085) | about 4 months ago | (#47364395)

Only if they also charge you and additional fee specifically for the privilege of receiving it.

Re:If this flys... (1)

nurb432 (527695) | about 4 months ago | (#47364879)

It comes off my monthly bandwidth cap.

Re:If this flys... (0)

Anonymous Coward | about 4 months ago | (#47365225)

Only if you download it.

Re:If this flys... (1)

jrumney (197329) | about 4 months ago | (#47365555)

Unlike phone carriers, ISPs do not take a substantial cut of the spammers profit.

About time. (3, Informative)

Anonymous Coward | about 4 months ago | (#47364205)

T-Mobile did this to me a few years ago and never reversed the charges (claiming I had to go to the slamming company for a refund, which I did but unsurprisingly I never got the promised refund). They claimed I must have confirmed it via SMS but I pointed out my account has SMS disabled so there was no way for me to receive nor confirm I wanted it. They didn't really care. Given that I find the rebuttal to be disingenuous.

Re:About time. (1)

deathguppie (768263) | about 4 months ago | (#47368227)

I am like a lot of people, I didn't switch to T-mobile until they started changing the way they did business. I previously had been with Sprint, then At&t. I can't say enough shitty things about either of those companies and what and how they billed. At one point I started getting a "service" charge from At&t that they just refused to explain. Hows them for apples. The thing is, T-mobile has been by far less expensive, and since I'm on an "unlimited everything" plan that costs me less than my limited plan with At&t there are no overages. I never have to worry about extra charges. (actually I think they do have late fees on the bill, but that's it) On top of that I get 2gb/month tethering for no additional charge. Do that on another carrier. No I don't work for T-mobile but this is the first time, I haven't truly "hated" my phone company. What's more you can bet Verizon and At&t were doing the same kinds of things back in the day.

Aren't all SMS charges pretty much bogus? (3, Insightful)

theodp (442580) | about 4 months ago | (#47364219)

These are outrageous, but even at 20 cents a text, it's gouging IMO.

Re:Aren't all SMS charges pretty much bogus? (2)

Charliemopps (1157495) | about 4 months ago | (#47364557)

These are outrageous, but even at 20 cents a text, it's gouging IMO.

you know SMS is completely and totally free for the carrier right? So it's even more of a scam than you think. The only reason they're not charging as much now is because there are so many IP text apps out there now. You're an idiot if you're paying for them at all.

Re:Aren't all SMS charges pretty much bogus? (2)

cbhacking (979169) | about 4 months ago | (#47364923)

Relatedly, T-Mobile US doesn't charge for texts at all. None of their plans in the last year or so *don't* including unlimited SMS/MMS, and lot of their earlier ones had unlimited messages too.

TMo also shows the breakdown in your monthly bill very clearly, including showing how each item (and the total) has changed in cost from one month to the next. So for example, when I added a new line to my plan, it was immediately and extremely obvious how much that cost me, and why. There's no way they could slip in a $10 charge under the noise; their own billing page wouldn't have anywhere to hide it. They could stick it under something like "regulatory and service fees" but then that category would double from one month to the next, which would be extremely obvious on the little month-to-month bar graphs they show.

Re:Aren't all SMS charges pretty much bogus? (1)

mythosaz (572040) | about 4 months ago | (#47364955)

The problem is, quite simply, that people don't read their bills.

If only people would read the contracts they sign and the bills they get:

Under section 37B of the contract signed by him, it states quite clearly that all offers shall become null and void if - and you can read it for yourself in this photostatic copy - "I, the undersigned, shall forfeit all rights, privileges, and licenses herein and herein contained," et cetera, et cetera... "Fax mentis, incendium gloria cultum," et cetera, et cetera... Memo bis punitor delicatum! It's all there! Black and white, clear as crystal!

Re:Aren't all SMS charges pretty much bogus? (1)

pla (258480) | about 4 months ago | (#47367165)

The problem is, quite simply, that people don't read their bills. If only people would read the contracts they sign and the bills they get

I realize you make a joke here, but you have it 100% right. In the US, I consider it reasonably safe to say that 90% of the people this affects had a monthly contract (yes, I know T-Mobile offers reasonable contractless plans, but unlike the other big carriers, their contracts don't keep penalize you once their phone-subsidizing portion finishes). That means 90% of the people this affects should have completely predictable phone bills from one month to the next. I pay $82 and change every month for a family plan with more minutes than I would ever use. If I get a bill for more than that, I read the bill and find out why.

"Oh yeah, I made that call from outside the US"
"Damn, I actually went over my minutes when Dad went in for surgery"
"I sent how many text messages? Well, okay..."
"What the fuck does 8888906150BrnStorm23918 mean and why did it cost me $10?"

One of these things is not like the others - You don't need to understand 99% of the bill to know that this month you paid $10 more than last month for no good reason.

Re:Aren't all SMS charges pretty much bogus? (1)

Munchr (786041) | about 4 months ago | (#47365181)

Sure, if you have a post-paid monthly or pre-paid monthly plan, they all currently include unlimited texting. Their pay as you go plan, however, still charges 10c per sent or received text message.

Re:Aren't all SMS charges pretty much bogus? (1)

arth1 (260657) | about 4 months ago | (#47365989)

Relatedly, T-Mobile US doesn't charge for texts at all. None of their plans in the last year or so *don't* including unlimited SMS/MMS, and lot of their earlier ones had unlimited messages too.

That's only true for domestic SMS. You can't even send or receive a single SMS internationally without paying a $10 monthly fee first. After that, whether you have to pay extra per message too depends on the country.

True, you might not have no friends or other contacts elsewhere in the world, but that's certainly not the case for me.

Re: Aren't all SMS charges pretty much bogus? (1)

arielCo (995647) | about 4 months ago | (#47364939)

The air interface may be "free" in a marginal-cost sense. SMSCs (and the associated charging solutions in the case of real-time billing systems) aren't, and companies like Acision [acision.com] make their fortunes selling these.

Re:Aren't all SMS charges pretty much bogus? (1)

Richard_at_work (517087) | about 4 months ago | (#47367429)

SMS is a service they provide you, they can charge what they want for that service - and you can choose whether or not to use that service.

And Then Some (4, Informative)

rmdingler (1955220) | about 4 months ago | (#47364241)

In my personal and professional experience, providing phones to field employees and teenagers, this sort of chicanery has occurred with AT&T, Sprint, and Verizon.

I was informed more than once that the companies have to accept third party billing charges. IMHO, what they don't have to do is hide the charges on the back of page four of the bill.

Read your monthly charge summaries carefully. If you catch a sham billing they will quickly remove it, but they will usually only go back a month or two. It's remarkably easy to miss a bogus four or five dollar monthly charge.

Re:And Then Some (1)

twistofsin (718250) | about 4 months ago | (#47364803)

At Verizon this was known as Premium SMS. All the carriers have this in some name or other. I know Verizon will block it if requested, and it's mainly used by scammers.

Re:And Then Some (1)

geekoid (135745) | about 4 months ago | (#47364941)

My T-Mobile bill has a place specifically for addition charges. East to find.
I think those crafty Devils call it:Addition charges.

Re:And Then Some (1)

rmdingler (1955220) | about 4 months ago | (#47366255)

Crafty Devils. Nice.

There's hope for you yet.

Re:And Then Some (1)

Aighearach (97333) | about 4 months ago | (#47367005)

According to the screenshots including in the court filing (the linked PDF in the summary) people with online bills had to click "Use charges" twice before getting any itemized list, and that list was still bundled with other t-mobile charges, so even then you would never see a list of the 3rd party charges with a total. And on that 3rd screen they are just "Premium services."

Also in the accusations is that prepaid customers were charged these $9.99/month amounts without ever being billed or notified.

And:

Defendant’s own internal documents demonstrate that consumers were complaining in increasing numbers about unauthorized charges from at least early 2012. These documents state that there had been an increase in complaints, explain that consumers “do not know what the charges are or why they are being billed for them,” and note several third-party merchants that Defendant’s employees had identified as being the subject of many complaints. Despite knowing about these complaints of unauthorized charges, Defendant did not take sufficient steps to determine whether other consumers actually authorized the charges for Third-Party Subscriptions purportedly offered by the problematic third-party merchants.

So they have them red-handed with their own documents having discovered this problem, and then continued to assist in ripping off customers. They didn't turn a blind eye, they saw and then looked away. But they were caught looking. And increasing their own percent take on those accounts!

There is more and more. The allegations get very specific.

Re:And Then Some (1)

swb (14022) | about 4 months ago | (#47365303)

I've always suspected that the telcos took a huge cut of third party billing. Which of course is why they make it possible, don't call attention to it in billing and play the ignoramus when it comes to the basically fraudulent nature of the whole situation.

The cell carriers are better about removing the charges and refunding multiple months of charges (well, at least 2-3) as well as being able to block them. Qwest was always terrible on our commercial accounts about refunding crammed charges and claimed they couldn't block them.

I'm glad to see the FTC do this and I think they should go so far as to actually ban the practice outright, at least as practiced. If they can do it the default should be "blocked" as a billing status on all accounts. Third party billers with a high degree of fraud complaints should be banned and their names forwarded to the FTC for criminal prosecution.

On the flip side, it seems so lucrative and low risk I wonder how I could get in on the action.

Re:And Then Some (1)

rmdingler (1955220) | about 4 months ago | (#47366233)

On the flip side, it seems so lucrative and low risk I wonder how I could get in on the action.

I, too, am cursed with the memory of a younger, less risk-aversion, version of myself.

I largely suspect that is why i simultaneously find interest in, and see right through, these rather thinly guised versions of deceit.

Other T-Mobile scams (0)

Anonymous Coward | about 4 months ago | (#47364323)

Oh, sure, when they get caught, they own up. They don't give the money back, but they "vigiorously pursue a policy" while still cashing the checks.

They've got other great scams. I'd heard about their pricing, which is low, but their sales people were *absolutely insistent* that you *must* get a new phone on their "separate" purchase plan, because "bringing over your old phone would lack features".

Bull pucks. It's an Iphone. Same hardware, similar sims, basic capacity is built-in by Apple. They're scamming people to buy unnecessary new phones, and the end result is that with the "new phone" payments your bill is just as bad as your old bill with AT&Y, Verizon, or the other major vendors. Mind you, they're all doing it, pretending that the "new contract" at lower price but refusing to give you the new contract without a new phone. Just went through this with ATs and Verizon's online websites, and they're all playing this game.

Re:Other T-Mobile scams (0)

Anonymous Coward | about 4 months ago | (#47365255)

You only have to get a new phone if you want that plan that pays off your current competitor contract. I took my AT&T iPhone 5 to T-Mobile no problem.

TMO fight for the consumers! (1)

dragon-file (2241656) | about 4 months ago | (#47364349)

Sorry after reading t-mobile's response, I felt the above Tron reference was appropriate.

I have an answer that will make everyone happy. (1)

Lumpy (12016) | about 4 months ago | (#47364353)

T-mobile refunds the last 2 years of cellphone service to all customers past and present.

That would be fair and just.

Crystal ball... (4, Insightful)

Charliemopps (1157495) | about 4 months ago | (#47364593)

If I look into the future I see a press release about a year from now:

"In a clear victory for consumers, the FTC has levied a fine of $20 million against T-Mobile in response to fraudulent SMS charges. The largest fine (related to fraudulent SMS charges on a tuesday, during a leap year) ever."

then another year out

"T-modile announced that a former FTC director will now work as CEO of Regulatory affairs. T-Mobile released a statement saying that they are pleased to be working with someone with so many years working in government. The FTC director said in a statement "I really like me new boat!"

Re:Crystal ball... (1)

Aighearach (97333) | about 4 months ago | (#47367015)

If you read the complaint, in addition to returning money they're also seeking force the alteration of the contracts to prevent the behavior in the future, and a broad injunction from further violations.

Knowing that the fine won't mean much doesn't tell you anything about the effort to stop the behavior.

Disappointing (1)

RyoShin (610051) | about 4 months ago | (#47364595)

If true, that leaves me a bit disappointed. I switched to their pay-as-you-go plan in October and have been happy enough with it: while their cell service is pretty crap compared to Verizon, they also didn't do anything super-evil like Verizon (that I was aware of)... until now. Even if true, I still prefer them over any of the other three major providers, so I don't plan on switching to anything else.

Re:Disappointing (1)

Aighearach (97333) | about 4 months ago | (#47367013)

According to the allegations, pre-paid customers aren't notified at all, the money just disappears from the account and no refunds are possible.

Re:Disappointing (1)

LordKronos (470910) | about 4 months ago | (#47368435)

According to the allegations, pre-paid customers aren't notified at all, the money just disappears from the account and no refunds are possible.

From my other post (to which you already replied and tried to put words into my mouth), I received a refund on my account. I didn't mention it there, but that was a prepaid account. So it clearly is POSSIBLE to get a refund, and they gave me no hassle over the matter.

Already obsolete (4, Informative)

rickb928 (945187) | about 4 months ago | (#47364611)

The FTC is infamous for bring suit even years after the transgressions occurred.

Typical. Not much to see here.

Indeed, from the Complaint:

"Until at least December 2013, T-Mobile has also charged consumers for other services..."

"Until at least December 2013, in addition to charging for phone services offered
by Defendant, Defendant has charged many consumers for other services offered by third-party
merchants. These purported services have included monthly subscriptions for content such as
ringtones, wallpaper, and text messages providing horoscopes, flirting tips, celebrity gossip, and
other similar information (“Third-Party Subscriptions”). Defendant typically has charged
consumers $9.99 per month for such Third-Party Subscriptions. "

No doubt.

"9. In numerous instances, Defendant has charged consumers for Third-Party
Subscriptions that the consumers did not order or authorize, a practice known as cramming.
Defendant has continued to charge consumers for Third-Party Subscriptions even after large
numbers of consumers complained about unauthorized charges. Refund rates for the
subscriptions were high – in some cases as high as 40%. Further, Defendant has continued to
charge consumers for Third-Party Subscriptions even after industry auditor alerts, law
enforcement and other legal actions, and news articles indicated that the third-party merchants
were not obtaining valid authorization from consumers for the charges. "

FTC boilerplate for these sorts of complaints. Every carrier has done this, some repeatedly, over the past few decades.

"11. In television and other advertisements, and during its sales process, Defendant
markets its telephone and data services to consumers. Defendant’s sales representatives often
discuss these services only, and not purported third-party services, with consumers. Defendant’s
contracts make clear and prominent representations about the services it provides; information
about third-party services is buried in lengthy terms and conditions of its service contract.
12. Defendant has not obtained authorization from consumers before charging them
for Third-Party Subscriptions. Instead, the third-party merchants or billing intermediaries
purportedly have obtained authorization. In many cases, however, these third parties have failed
to obtain authorization from consumers."

And indeed, same old boilerplate. Especially the phrase "buried in lengthy terms and conditions of its service contract"

If the FTC would similarly file complaints against any number of corporations that do just this, they would be very very busy indeed.

This is PR for the FTC. You go, boyz!

T-Mobile and the customer liable here (4, Interesting)

Virtucon (127420) | about 4 months ago | (#47364717)

It's funny to see T-Mobile back-peddling on this issue however anybody who could have had the premium services dropped could have done so at any time. For somebody to not review their bill and see that $10/mo was getting charged for this is a bit incredulous. Sprint, hell all the Cell providers have this kind of shit. Having gone through it with teenagers, I can tell you I had to scrutinize the bills monthly. T-Mobile's problem is that their billing and customer service practices make it a pain in the ass to get these things turned off. So there is merit in this suit moving forward but IMO there is no premium SMS service. Shit jokes, daily bikini girl pics. It's another way to bilk you out of your money like 900 numbers. [wikipedia.org] and that's something the FTC should be going after as well.

I'm also wondering about the timing of this with the pending Sprint acquisition. It'll definitely put that on hold, which will force T-Mobile to pay some hefty fine (tax) that you and I will have to pay to cover the costs of giving the government more money. It's funny how that works out: company gets fined and then the same company passes those costs onto consumers.

Re:T-Mobile and the customer liable here (2)

geekoid (135745) | about 4 months ago | (#47364967)

What back peddle? That have a spot on their bills specifically for additional services. IT's been there as long as I can remember and I've been with T-Mobile for over a decade.

Maybe this court case will get so every cell provider no longer HAS to take these charges.

Re:T-Mobile and the customer liable here (0)

Anonymous Coward | about 4 months ago | (#47366079)

this is just to reduce the value of t-mobile before sprint buys them

Re:T-Mobile and the customer liable here (1)

Aighearach (97333) | about 4 months ago | (#47367017)

If you read the PDF you'll find screenshots of the bills right in the complaint, and they refute your astroturf.

Re:T-Mobile and the customer liable here (1)

Virtucon (127420) | about 4 months ago | (#47368495)

Seriously? They're back peddling because I've had t-mobile and it was a PITA to get rid of those charges and to block them from happening again. At the time I could get them removed from future billing statements. Their position was once I was billed I had to pay them because they were used. I had to argue the point that a 14 year old inadvertently used the feature, that I didn't authorize. Once I did that the charges miraculously disappeared. I'm glad the FTC is calling them out on this but it's a horrible business practice. Granted T-Mobile hasn't been doing all that well but still these services are shit and a way to scalp you.

As a T-Mobile customer... (1)

Anonymous Coward | about 4 months ago | (#47364749)

They have the best customer support in the biz hands down. This smells funny...

Re:As a T-Mobile customer... (1)

symbolset (646467) | about 4 months ago | (#47365063)

This was my thought. T-Mobile has always been kind to me.

Legal problems (1)

WaffleMonster (969671) | about 4 months ago | (#47365523)

For years politicians chiseled away at regulations and lending requirements in the name of increasing home ownership and making bankers happy while leveraging "meltdown" as cover to escape any responsibility for the environment they helped create.

Likewise telephone billing problems were created by politicians thru legal requirements mandating passing charges on to customers by default. If the law was opt-in vs opt-out none of this shit would be happening.

In the real world you can't create this kind of permissive environment full of conflicts of interest
and seriously not expect it to be abused to the hilt. What FTC is doing amounts to whack-a-mole.

US Mobile plans are f'd. (2)

Rick in China (2934527) | about 4 months ago | (#47365745)

In China, I buy a SIM, charge it with a card from a little shop or street vendor - or via electronic bill/payment machine at 7-11 or wherever, and use it til it runs out. I'm on a plan, but can pay for my plan with a charged account in this way. The plan costs I think $15usd/month and I never run over my limits - has a few hundred megs of data, a couple hundred minutes of talk, and I never pay anything for any incoming SMSs.... I can also pay for stuff off my charged phone account by entering my phone # into whatever service, getting a SMS with a code in it, and using that code in the service I'm trying to pay for's interface. It's not magic, but when looking at the fucked up US mobile system, and when I go back to Canada and have to arrange service for whatever length of time and it's always headaches, it sure does seem like it... (20mbit fibre is also a whopping $20/mo)

If this is true only one solution id fair (0)

Anonymous Coward | about 4 months ago | (#47365895)

Make them give back every sent to the customer they took it from.
every last dime. Then for punishment a year of unlimited everything.

My Experience - T-Mobile Is Guilty, Guilty, Guilty (0)

Anonymous Coward | about 4 months ago | (#47366509)

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).

I had ordered two new phones, I think they were the HTC One, something like that. To sell me on the idea of getting the phones for free, but signing a two year contract (my old contract has expired) T-Mobile agreed to $10 for each line to get 5 GB data. In the afternoon I got a text message confirming the deal, except I noticed the data plans were $25 for each line, not $10.

I called T-Mobile in the afternoon to talk about the inconsistency. The CSR rudely said there was no such promise made and that I must have been hearing things. His tone was condescending, implying that I was a liar, making the whole thing up. He also implied I must be financially desperate for trying to work T-Mobile over $10.

Despite my being long-term loyal customer the CSR rudely refused to give me the $10 deal. The CSR thought I wouldn't and couldn't do anything about it. And when I said to simply close the accounts, he said "OK, I'll close em for ya." He didn't try to save the account or keep me happy.

(This was about the time that T-Mobile customer service started its rapid decline.)

So that afternoon I canceled the phone order and closed my T-Mobile accounts. It took five days and four phone calls to finally get T-Mobile to close the accounts. And the only reason they finally closed it was because I threatened to file a complaint with the PUC.

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.

So is T-Mobile "guilty" of these charges? From my personal experience, I would say, of course.

To return T-Mobile's gesture, I am contacting the FTC lawyers tomorrow and telling them about my experience with MobiTV. I bet there's evidence of this kind of conduct from way, way back. For example, how many people bothered to check if they were paying for what they thought was 5GB data, but T-Mobile was providing only 2.5 GB.

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.

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

Remember, 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 this charges in this Complaint.

Telstra too (0)

Anonymous Coward | about 4 months ago | (#47366643)

Telstra does something similar by sending calls to the wrong number (so people have to re-dial).

Free incoming text and talk in many countries (1)

yayoubetcha (893774) | about 4 months ago | (#47368759)

I travel abroad occasionally, and every country I have been to in Europe, the Middle East, etc., has free incoming text and talk. The Countries demand that carriers do that because who can control who contacts you?

Damn, if only we (U.S.) had a Government agency that could be in control of such things here.... Nah, we don't need something like that.

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