FTC files charges against T-Mobile for fraudulent SMS charges

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By Phi Tran Comment

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T-Mobile’s Uncarrier Plan is now looking eerily like all other phone carriers – full of deceit. The latest FTC charges against the mobile carrier alleges that the company is guilty of mobile cramming: placing unauthorized charges onto customer’s phone bills. It’s possible that the company has made millions if not hundreds of millions by collecting as much as 40% off of these invalid, third party charges.  

Typically, phone carriers are able to get away with hidden charges by sending out billing statements that are very long. T-mobile’s phone bills are now as long as 50 pages.  The “third party billing” technique used by T-Mobile can come in the form of monthy SMS subscription services like horoscopes or celebrity gossip, usually for as high as $9.99 per month.  Since most users were unlikely to read all of the printed statement, they were not likely to catch the hidden charges.

The complaint also alleges that T-Mobile’s full phone bills, which can be longer than 50 pages, made it nearly impossible for consumers to find and understand third-party subscription charges. After looking past a “Summary” section as well as an “Account Service Detail” section, both of which described “Usage Charges” but did not itemize those charges, a consumer might then reach the section labeled “Premium Services,” where the crammed items would be listed.

According to the complaint, the information would be listed there in an abbreviated form, such as “8888906150BrnStorm23918,” that did not explain that the charge was for a recurring third-party subscription supposedly authorized by the consumer. In addition, the complaint notes that consumers who use pre-paid calling plans do not receive monthly bills, and as a result the subscription fee was debited from their pre-paid account without their knowledge.

When consumers were able to determine they were being charged for services they hadn’t ordered, the complaint alleges that T-Mobile in many cases failed to provide consumers with full refunds. Indeed, the FTC charged that T-Mobile refused refunds to some customers, offering only partial refunds of two months’ worth of the charges to others, and in other cases instructed consumers to seek refunds directly from the scammers – without providing accurate contact information to do so.

According to internal company documents obtained by the FTC , T-mobile was made aware of its fraudulent practices as early as 2012. The suit against T-Mobile will seek full refunds for consumers, but there’s no indication of fines at this time.

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