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FTC says T-Mobile added bogus charges to customers' invoices

Posted: , by Alan F.

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FTC says T-Mobile added bogus charges to customers' invoices
T-Mobile is being accused by the FTC of adding bogus charges to customers' bills. The agency says that the nation's fourth largest carrier added premium features to subscribers' bills without being authorized to do so. This practice is called "cramming." In this case, T-Mobile allegedly placed charges for services from third-party companies, onto customer's bills. The agency said that T-Mobile did a good job of covering up what it was doing so that the bogus charges could not be discovered by customers. FTC Chairwoman Edith Ramirez is demanding that T-Mobile repay all of its customers who were affected by the bogus charges.

This accusation could not have come at a worse time for T-Mobile. Led by its enigmatic CEO John Legere, the carrier has set out to change the industry with a "customer comes first" attitude. T-Mobile is paying the Early Termination Fees of customers who leave another carrier for T-Mobile. It also gives away free data for tablet users. And just two weeks ago, T-Mobile announced that its Music Freedom initiative will allow customers to listen to unlimited amounts of streaming music without it counting against their monthly data cap.

The result of all of these customer-friendly changes has been a rising number of new customers coming to T-Mobile. With his casual dress and long-ish hair, Legere has captured the attention of many younger smartphone users, happy to see a "rock and roll" executive. It should be interesting to see if rival carriers start making comments about T-Mobile in light of the accusation, or if AT&T, Verizon and Sprint take the high road and keep quiet about this.

There is also the question about how this will affect the rumored acquisition of T-Mobile by Sprint. Two weeks ago, Sprint reportedly received $40 billion in financing from eight banks, to cover a purchase of T-Mobile. The deal is expected to value T-Mobile at $40 a share, or $32 billion. A merged Sprint-T-Mobile would be run by T-Mobile CEO John Legere, according to the latest reports.

source: USAToday

UPDATE: The FTC case against T-Mobile would be the largest such "cramming" case ever brought by the Feds and deals with bogus charges dating from December 2009 to 2013. The dollar amount of the charges adds up to hundreds of millions of dollars. The FTC charges deal with third party content such as horoscopes, celebrity gossip and flirting tips, and each subject matter aded $9.99 per month to the bill. T-Mobile kept 30% to 40% of the fees, and passed the remainder on to the merchant, according to the FTC.

In 2010, Verizon settled a case with the FTC involving the return of $50 million in "mystery fee" overcharges and also paid the U.S. Treasury $25 million.

T-Mobile CEO Legere says that procedures are now in place to prevent unauthorized charges from occurring again.

source: USAToday

37 Comments
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posted on 01 Jul 2014, 15:13 5

1. BattleBrat (Posts: 1082; Member since: 26 Oct 2011)


laughs my tmobile bill is 20 to 30 $ a month less than my verizon bill. And I have unlimited everything.

posted on 01 Jul 2014, 16:35 5

11. stealthd (Posts: 968; Member since: 12 Jun 2011)


Except for the coverage, that's pretty limited

posted on 01 Jul 2014, 20:30 1

24. BattleBrat (Posts: 1082; Member since: 26 Oct 2011)


No, tic for tac where I live.

posted on 01 Jul 2014, 21:03 3

25. DAMONORIBELLO (Posts: 91; Member since: 18 Mar 2012)


Well, when you grow up and decide to travel a little, you will see the difference.

posted on 01 Jul 2014, 22:44 1

26. BattleBrat (Posts: 1082; Member since: 26 Oct 2011)


I'm 28, and I do travel. I use my phones most, you guessed it, where I live. The Tmo phone is mostly used as a hot spot, but I do make calls on it.

posted on 02 Jul 2014, 09:59

31. dmh0284 (Posts: 12; Member since: 04 Apr 2014)


I recently took a trip across the state with 3 friends. All three of them have t-mobile and I have AT&T. They were on EDGE about 95% of the time, while I was on 4G. I was actually thinking about switching to T-Mobile before that. I actually have a $70 credit from them that I have to use before the end of July, but I think I'm just going to eat that money because having to deal with that lack of 4G coverage just isn't worth it.

posted on 02 Jul 2014, 11:13

33. Augustine (Posts: 729; Member since: 28 Sep 2013)


Exactly. As a long-time customer of TMUS, I find it rather annoying when traveling that all I can get is 2G. It's like traveling back in time to the last century.

It's very un-carrier of TMUS to have such wide areas covered by just 2G. Upgrading those areas to LTE, as it's promised to, is way past due.

posted on 02 Jul 2014, 13:38 1

36. Deadeye37 (Posts: 78; Member since: 25 Jan 2011)


I'll agree that T-mobile coverage is pretty limited compared to Verizon & AT&T. However, over the past 6 months things have really improved. I live in Utah and driving to Las Vegas on I15, I would have no data coverage for about 300 miles with exception of a quick blip through St. George. Last month, I did that drive and was surprised to find that I had coverage through most of my drive with some parts in the middle of nowhere having 4G. Voice coverage was fine the whole trip.

posted on 01 Jul 2014, 15:14 5

2. hawke9150 (Posts: 31; Member since: 17 Jun 2011)


Now we know how T-Mobile can afford to pay for all of these Early Termination Fees...

posted on 01 Jul 2014, 15:14 1

3. mikewillz (Posts: 40; Member since: 03 May 2013)


I'm shocked and appauled.

posted on 01 Jul 2014, 15:14 15

4. Mxyzptlk (Posts: 3624; Member since: 21 Apr 2012)


Bs. T-Mobile actually stopped this last year and were very much against it. Way to target a consumer friendly company.

posted on 01 Jul 2014, 20:09 2

22. Saamic (Posts: 119; Member since: 20 Feb 2012)


Yeah, I'm pretty skeptical about this. I think it's mainly related to T-Mobile doing so well in the past few months. I feel that other major companies, most likely including Verizon, are working some politics to ruin T-Mobile's current image and hype.

posted on 01 Jul 2014, 20:11 1

23. Saamic (Posts: 119; Member since: 20 Feb 2012)


Then again I'm just being skeptical and considering all possibilities. I believe it would be close-minded of me to not consider this possibility though.

posted on 02 Jul 2014, 00:13

28. PapaSmurf (Posts: 8553; Member since: 14 May 2012)


Mxyz, you are officially my favorite person on this site for the week.

posted on 01 Jul 2014, 15:35 3

5. wilsong17 (Posts: 949; Member since: 10 Mar 2013)


I only pay 80 unlimited lte plus insurance and international. . I don't see any bogus charge

posted on 02 Jul 2014, 00:12 1

27. PapaSmurf (Posts: 8553; Member since: 14 May 2012)


Cancel paying for insurance. It'd cheaper to buy the phone outright if you think about it. You're paying $11.99 a month for insurance when you still have to pay a $175 deductible if anything happens to it. Save yourself $13 a month on your bill.

posted on 02 Jul 2014, 00:57 1

29. wilsong17 (Posts: 949; Member since: 10 Mar 2013)


No I only pay 8 dollars for insurance and 10 international... I have a note 3 I don't mind paying for insurance. ..also I did pay full price 800 dollars

posted on 01 Jul 2014, 15:43 3

6. eman99 (Posts: 232; Member since: 03 Aug 2010)


Still cheaper than the competition

posted on 01 Jul 2014, 15:56 3

7. DocOc (Posts: 105; Member since: 23 Apr 2014)


These were not "bogus" charges. And they are not charges from T-mobile. They are third-party charges on the Tmobile bill brought on by consumers that have no idea what they are doing. The reporting of this is so blown out of proportion and misleading. Every carrier has this issue and it's not the carriers' fault. It's people unwittingly incurring charges by scrupulous third-party companies.

posted on 01 Jul 2014, 16:04 3

9. Sushimafushi (Posts: 2; Member since: 01 Jul 2014)


According to FTC investigation T-mobile was receiving 35 to 40% profit of those "bogus" chargers.

posted on 01 Jul 2014, 16:01 3

8. 1ceTr0n (Posts: 510; Member since: 20 May 2012)


I don't see anything bogus on my billhttp://imgur.com/hKB0Qe3

posted on 01 Jul 2014, 16:18 1

10. cncrim (Posts: 515; Member since: 15 Aug 2011)


innocent until prove guilty.

Could it be that she get lobby by Verizon and Att, so make Sprint Tmobile merge more difficult?

posted on 01 Jul 2014, 16:49 2

12. Augustine (Posts: 729; Member since: 28 Sep 2013)


Given the IRS persecution of critics of the regime, it wouldn't surprise me if the FTC would be acting on the commands of those paying for political campaigns, notoriously ATT and VZW. It might be a hack, smearing job paid by those who own the Hollow States of America.

posted on 01 Jul 2014, 16:58 1

13. Federated (Posts: 239; Member since: 06 Mar 2010)


Nope. Still $70.00/month unlimited everything. Nothing has changed. Didn't increase by a penny.

posted on 01 Jul 2014, 17:07

14. EspressoBrownie (Posts: 6; Member since: 08 May 2014)


Pay $260 a year for two lines unlimited everything and not once I've seen these so call charges exist.

posted on 01 Jul 2014, 17:40

15. tigermcm (Posts: 724; Member since: 02 Sep 2009)


Lmao looks like that sprint deal is going thru

posted on 01 Jul 2014, 18:13 2

16. Dante216 (Posts: 26; Member since: 18 Dec 2013)


There are no bogus charges. A customer will accidentally hit some type of app or premium text service that charges their bill. It isn't hidden. This article is horribly written.

posted on 01 Jul 2014, 18:27

17. Augustine (Posts: 729; Member since: 28 Sep 2013)


Stop pricking the victim's bubble!

posted on 01 Jul 2014, 18:27 2

18. darkkjedii (Posts: 11763; Member since: 05 Feb 2011)


Glad I left when I did, At&t baby.

posted on 01 Jul 2014, 18:48 3

19. theo14461 (Posts: 165; Member since: 08 Oct 2009)


Yes sir! I'm glad I left that no-coverage carrier too. Who cares how cheap their rates are, worthless without a connection.

posted on 01 Jul 2014, 19:06

20. sun0066 (Posts: 77; Member since: 12 Feb 2011)


Omg if t mobile is charging that I can not imagine what the others carriers are charging when the bill from the others are so high . Love t mobile and it's pro consumer polices , and here is south florida the coverage is really good and of course you don't have be looking to how many data you are consuming , it is all you can eat

posted on 01 Jul 2014, 20:08 1

21. ThePython (Posts: 289; Member since: 08 May 2013)


Guilty until proven innocent. Oh wait...

posted on 02 Jul 2014, 05:42 1

30. billgates (banned) (Posts: 555; Member since: 29 May 2014)


Who cares, the bigger issue is their poor coverage that they don't seem to care about improving

posted on 02 Jul 2014, 10:32 1

32. joseg81 (Posts: 165; Member since: 15 Jul 2011)


why is t-mobile being blamed? it states clearly in those ads for those services that you'll get charged $9.99/mo. it's billed to your monthly bill since you don't give them a credit card. what that company and t-mobile does with that money is their business.

what i don't get is smartphones get smarter but people get dumber. i could easily look up half the stuff they charge for in those stupid services n if i wanted a ringtone i could make it myself. why are we so eager to sue everytime we make a mistake??? it's so much easier to sue then to own up to your mistakes. lol i'm gonna start a service soon. pay me $5/mo and i'll txt you your horoscope daily since you're to stupid to use google.

posted on 02 Jul 2014, 12:45 1

34. youlookfoolish (Posts: 124; Member since: 14 Dec 2012)


I'm not a T-Mobile fan, but this lawsuit is frivolous and baseless.

This is old news from last year, firstly. Secondly, sue the 3rd party responsible for the scam not the carrier forced to bill who now has to clean up this mess. Lastly, T-Mobile has been losing money hand over fist so any perceived profit from dubious practice is unlikely.

Not a conspiracy theorist and doubt this has anything to do with Sprint merger but it is embarrassing when lobbying will play a vital role.

posted on 02 Jul 2014, 13:31 1

35. Deadeye37 (Posts: 78; Member since: 25 Jan 2011)


Talk about a derp moment for the FTC. Not only did T-mobile stop this in 2013, but T-mobile also put in place a program so that if people were charged those fees in the past, they can get refunded.

In my option, this paragraph says it all:
"In 2010, Verizon settled a case with the FTC involving the return of $50 million in "mystery fee" overcharges and also paid the U.S. Treasury $25 million."

They're probably going to try to get T-mobile to pay $25 million to the government to help pay for government stuff...

posted on 02 Jul 2014, 16:13

37. blackberry_Boy (Posts: 154; Member since: 27 May 2014)


I knew it I use to work for T Mobil for two years actually during the time of these bogus charges I would look at customers bills and look like wtf is this it don't make since and customer care dint kno how to explain it neither.

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