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

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

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37 Comments

1. BattleBrat

Posts: 1476; Member since: Oct 26, 2011

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

11. stealthd unregistered

Except for the coverage, that's pretty limited

24. BattleBrat

Posts: 1476; Member since: Oct 26, 2011

No, tic for tac where I live.

25. DAMONORIBELLO

Posts: 109; Member since: Mar 18, 2012

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

26. BattleBrat

Posts: 1476; Member since: Oct 26, 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.

31. dmh0284

Posts: 50; Member since: Apr 04, 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.

33. Augustine

Posts: 1043; Member since: Sep 28, 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.

36. Deadeye37

Posts: 287; Member since: Jan 25, 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.

2. hawke9150

Posts: 32; Member since: Jun 17, 2011

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

3. mikewillz

Posts: 52; Member since: May 03, 2013

I'm shocked and appauled.

4. Mxyzptlk unregistered

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

22. Saamic

Posts: 119; Member since: Feb 20, 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.

23. Saamic

Posts: 119; Member since: Feb 20, 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.

28. PapaSmurf

Posts: 10457; Member since: May 14, 2012

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

5. wilsong17 unregistered

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

27. PapaSmurf

Posts: 10457; Member since: May 14, 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.

29. wilsong17 unregistered

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

6. eman99

Posts: 409; Member since: Aug 03, 2010

Still cheaper than the competition

7. DocOc

Posts: 143; Member since: Apr 23, 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.

9. Sushimafushi

Posts: 2; Member since: Jul 01, 2014

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

8. 1ceTr0n

Posts: 549; Member since: May 20, 2012

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

10. cncrim

Posts: 1558; Member since: Aug 15, 2011

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

12. Augustine

Posts: 1043; Member since: Sep 28, 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.

13. Federated

Posts: 263; Member since: Mar 06, 2010

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

14. EspressoBrownie

Posts: 15; Member since: May 08, 2014

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

15. tigermcm

Posts: 861; Member since: Sep 02, 2009

Lmao looks like that sprint deal is going thru

16. Dante216

Posts: 32; Member since: Dec 18, 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.

17. Augustine

Posts: 1043; Member since: Sep 28, 2013

Stop pricking the victim's bubble!

18. darkkjedii

Posts: 30786; Member since: Feb 05, 2011

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

19. theo14461 unregistered

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

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