Jul 01 AT 4:13 PM Dima Aryeh 12 Comments

FTC accuses T-Mobile of knowingly profiting off fraudulent SMS services


The FTC has filed a complaint against T-Mobile regarding those pesky subscription-based “premium SMS services.” According to the complaint, T-Mobile has done quite a few things wrong here. First of all, despite many complaints and refund requests, T-Mobile has done nothing to stop fraudulent charges from these companies and has even profited from it. As much as 40 percent of what is charged by these services could have gone to T-Mobile.

There are also reports of T-Mobile refusing to give full refunds for these charges, giving partial refunds or even claiming that customers have authorized these charges despite there being no proof of this. And thanks to T-Mobile’s poor bill layout, finding fraudulent charges is extremely difficult. The charges are not shown on any summary and have to be found elsewhere in the massive amounts of papers. And in the case of prepaid customers, the charges are taken off of their prepaid cards with no bills to look through.

These complaints are absolutely unproven so far, and will be handled by a court. Until then, we won’t know if T-Mobile is guilty of any wrongdoings. However, these seem like pretty shady business practices with some serious lack of consumer protection. Have you had any experiences with these pesky premium SMS services?

Source: PR Newswire

Dima Aryeh is a Russian obsessed with all things car and tech. His time is split between gaming and fixing his racecar. He also does photography in his spare time.

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  • Bart

    Well, if you really wanted to do some investigative reporting, you could have T-Mobile customers submit portions of their bills (with specific account details blacked out) submit them to androidandme. Might prove to be a very interesting article.

  • tlying

    T-MO’ BILL
    The backlash against T-Mobile in the US is officially underway

    It feels like just last month, TMobile CEO John Legere accused Verizon and AT&T of “raping” (ugh) its customers and that “the fuckers hate you”.

    In a complaint filed today, the Federal Trade Commission is charging mobile phone service provider T-Mobile USA, Inc., with making hundreds of millions of dollars by placing charges on mobile phone bills for purported “premium” SMS subscriptions that, in many cases, were bogus charges that were never authorized by its customers…

    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.

    T-Mobile: We Shouldn’t Be Sued Over Bill-Cramming Because We’re Not Doing It Anymore & We’re Super-Sorry

    Earlier this afternoon, the Federal Trade Commission filed a complaint against T-Mobile, alleging the wireless carrier made hundreds of millions of dollars off of bogus premium text-messaging charges “crammed” onto customers’ bills. The response from T-Mobile CEO John Legere isn’t exactly what you would describe as contrite.

    “We have seen the complaint filed today by the FTC and find it to be unfounded and without merit,” writes Legere. “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.”

    So there you go, America. T-Mobile shouldn’t be sued for something it made a mountain of money from because it is no longer making that mountain of money and it’s offering refunds to customers who “feel” they were charged for something they didn’t order.

    Legere – who struts around in a leather coat, crashing his competitors’ parties, has a history of making grandiose statements about his company and blatantly mocking his much bigger competitors, and who recently used the word “rape” in reference to AT&T and Verizon – calls the FTC suit “sensationalized,” which is a bit like Bob Hope calling Bing Crosby dead.

    Legere comes across like the snotty teen who got caught doing something wrong and then cops an attitude when he’s told that “I’m no longer doing it” does not wipe away the transgression.

    In speaking with reporters after today’s announcement, Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, explained that the agency “did engage in settlement negotiations with T-Mobile, but were not able to reach a settlement.”

    Here is the entire statement from Legere, presented in appropriately colored text:

    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.” said John Legere, CEO T Mobile USA. “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, 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.

  • Chris

    This doesn’t surprise me. They are good at milking the most money from their customers. I really love their reactivation fees. 20 dollars per line can get steep for someone living paycheck to paycheck. I spent more than 500 dollars one year because food and diapers for my then new baby was more important. So jokes on you TMo. I now have a Nexus 5 on straight talk. Not looking back now.

  • TruFactz

    Looks like tmo responded in a timely fashion. I just went on tmonews and saw they responded kinds pissed…..

  • jerrbomb

    The FTC to T-Mobile.. “Lipstick taser..”

  • Micah owensby

    Yes. I used to work at T-Mobile. Things such as this happened too often.

  • jake

    What are these “premium sms services”? I am not familiar with this topic.

    • http://www.androidandme.com Dima Aryeh

      Have you ever seen those commercials on TV that say “Get your horoscope! Text 43834 and you’ll get your horoscope right on your phone!” Those kinds of texts are actually services that charge you monthly, they’re scams that rely on people not noticing the monthly charges.

  • TruFactz

    Remember what was it…..JAMBA or something like that? where you saw the commercial w/the crazy frog and they asked “Would you like this as a ring tone? text LAME1 to 55855″? yeah, premium services

  • Hawaiian

    Just as small piece of the past: http://goo.gl/cKO1o2

  • Panda

    Hey, guys! Be careful of what you say regarding this controversy on their Facebook page. I commented on it and got banned from commenting for it. They also deleted my comment. I’m trying to get unbanned now, as I don’t think what I said was worth banning me over. It’s not like I called them out or anything.

  • Panda

    Scratch that. They unbanned me. Still, watch what you say on their social media pages. Getting banned is a pain one doesn’t need. :)