FTC to T-Mobile: Cram this!

Written by on July 10, 2014 in BillingViews, News with 0 Comments

While T-Mobile has been busy becoming the ‘Uncarrier,’ it’s been leading a double life. The carrier that’s been going out of its way to show it’s not your typical carrier – including eliminating overage fees and not charging streaming music against data plans – has been accused by the Federal Trade Commission (FTC) of cramming.

And this isn’t just a case of a few errant bills that contained billing mistakes; the FTC claims that T-Mobile charged customers for third-party ‘premium’ SMS services that in many cases were never authorized by customers in the first place. Even worse, the cramming went on for years and even after customers complained.

Did T-Mobile get greedy with its substantial cut (35-40 percent) from these services and hope no one would notice the bogus charges, or was this really a case of T-Mobile itself being fooled by fraudsters?

Outspoken T-Mobile CEO, John Legere, posted a blog just days after the cramming story came to light accusing the FTC of sensationalism and conducting a smear campaign. He also played the victim card by saying that these third-party service providers were responsible for getting customer approval, and that T-Mobile has now – as have all other major U.S. mobile providers – stopped offering these text services.

T-Mobile may claim to be the innocent party here, but considering that some customers received these charges for up to two years – and have been complaining for that long – the argument doesn’t hold water. Also, these third-party charges appeared on page 1 of bills simply as ‘usage charges,’ with only slightly more information presented toward the back of the detailed bill that can be dozens of pages long. But as we know, most customers don’t do a line-by-line analysis of their cell phone bill and would most likely miss an innocuous charge of $9.99 thinking it was one of the many fees regularly tacked onto their bill.

For its part, the FTC has been making news recently with its crackdown on cramming going back the past couple of years. The agency has gone after the actual culprits with a vengeance, but now has turned its attention to the operators, which it finds just as complicit as the fly-by-night companies bilking customers on a monthly basis.

As for the SMS providers, they are taking advantage of customers who might have unwittingly tried their services out once or twice and then failed to read the fine print about ongoing charges. This doesn’t excuse what they’ve done, or explain why it’s so difficult to get those charges removed, but it does raise the issue of better consumer education when it comes to mobile offerings from an external provider.

Due to T-Mobile’s reputation of going after competitors’ practices, including pricing and fees, this incident will probably taint the carrier’s reputation for a while, even after Legere promised to give full refunds to current and former customers. But in true Uncarrier fashion, T-Mobile will probably come up with another gimmick soon that will make us forget all about it.

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Anita Karvé

About the Author

About the Author: Anita is a writer and editor with 20 years of experience covering just about everything in the technology space with a focus on computer networking and telecommunications. She was managing editor of Billing & OSS World magazine and technology editor at Network magazine and most recently was in charge of newsletter coverage at TM Forum. .

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