FTC and FCC Go After T-Mobile for Cramming

Posted by at 12:45 pm on July 1, 2014

The Federal Trade Commission today filed a complaint regarding T-Mobile’s billing practices for premium third-party services.

The FTC alleges that T-Mobile made millions of dollars by allowing companies to tack high monthly fees onto its customers’ bills, while often pocketing 30% to 40% of those fees. The practice is often referred to as cramming. The FTC alleges that T-Mobile knew about potential fraudulent charges made against its customers in 2012, but didn’t begin to take action until 2013.

The complaint suggests T-Mobile often hid third-party charges in lengthy and difficult-to-understand monthly bills. The FTC also believes T-Mobile didn’t provide customers with full refunds, flat-out refused to refund some customers, and in some cases told customers to recoup the charges directly from the scammers – without providing the pertinent contact details. “It’s wrong for a company like T-Mobile to profit from scams against its customers when there were clear warning signs the charges it was imposing were fraudulent” said FTC Chairwoman Edith Ramirez. “The FTC’s goal is to ensure that T-Mobile repays all its customers for these crammed charges.”

The FTC wants a court order to permanently prevent T-Mobile from engaging in mobile cramming, to obtain refunds for consumers, and to relieve T-Mobile of its ill-gotten gains. The FTC’s story differs significant from the one told by T-Mobile.

Late last year, the company said it tried to police premium SMS services, but too many of its partners were breaking the rules. T-Mobile discontinued premium SMS services across its network in late 2013, and agreed to refund some customers. T-Mobile recently reminded customers to check their eligibility for those refunds. T-Mobile’s efforts on behalf of its customers appear not to have dissuaded the FTC from taking its own action.

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