The Federal Trade Commission has accused T-Mobile of placing hundreds of millions of dollars of bogus charges onto its customers' phone bills.
FTC alleges T-Mobile engaged in a shady practice known as "third party
billing," or "cramming." Customers would get charged from shifty
"premium texting" third party services, like the kinds that send
horoscopes or dating tips, even when they'd never authorized the fees.
T-Mobile allegedly kept a hefty chunk of these fake charges.
a process known as "third-party billing," a phone company places
charges on a consumer's bill for services offered by another company,
often receiving a substantial percentage of the amount charged. When the
charges are placed on the bill without the consumer's authorization, it
is known as "cramming."
This Is A Big Deal
These are huge
accusations: The FTC alleges that T-Mobile has taken in hundreds of
millions of dollars from tricking customers. They accuse the network of
sometimes charging customers for services that ended up getting refunded
at a rate of 40 percent a month. The reason why these refunds were
coming in fast and furious? According to the FTC, because the customers
had never agreed to the charges. That means the 60 percent who didn't
ask for a refund overpaid T-Mobile. T-Mobile's full phone bills can be
around 50 pages long, and the FTC says these phony charges are hard to
The FTC also alleges that, in some cases, T-Mobile refused refunds to people who figured out that they were getting scammed.
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," FTC Chairwoman Edith Ramirez said in a
statement. "The FTC's goal is to ensure that T-Mobile repays all its
customers for these crammed charges."
did engage with settlement negotiations with T-Mobile but we were not
able to reach a settlement," FTC Consumer Protection Director Jessica
Rich said during a conference call about the lawsuit.
FTC is seeking refunds for consumers, but have not reached a specific
settlement amount. The FCC has also launched a separate inquiry.
I Think I'm Getting Ripped Off - What Should I Do?
you think you've been defrauded by T-Mobile, it's still unclear how
exactly the carrier will make amends and dole out refunds if it is found
"We definitely want consumers to get refund but we have not determined how they will get them," Rich said.
"Consumers should read their bills closely and quickly contact their
carriers if they see any unauthorized charges," she said. She also
recommended that consumers block all third-party charges.
customer Kevin Rivers told Gizmodo his bills are no longer available on
the company website, so you may have to wait to comb through your bill
if this is a widespread issue.
Not on T-Mobile? Don't Look So Smug: You May Not Be Safe.
didn't come out and say that other carriers were up to the same
shenaBrothans. But she definitely didn't deny that the FTC has knowledge
about cramming practices from other providers. Even if you use Sprint or
another carrier, this is a good time to actually read through your
We've asked T-Mobile to comment on the allegations and will update if we hear back. [FTC]