Last week, the Federal Trade Commission (FTC) filed an official complaint alleging that T-Mobile made millions from allowing third-party companies to bill customers for Premium SMS services. The FTC alleged that T-Mobile received anywhere from 35 to 40 percent of the total amount charged to consumers.
A significant portion of the complaint centers around whether T-Mobile continued this practice after becoming aware of this issue and whether bills were intentionally long and confusing so as to hide the Premium SMS charges.
T-Mobile responded to the FTC by claiming that the allegations were “unfounded and without merit.” T-Mobile also said that they stopped billing for these Premium SMS services last year and that they launched a program to provide full refunds for any customer that feels that they were charged for something they did not want.
T-Mobile has in the past and will continue to keep our pledge to bill customers only for what they want and what they have purchased for as long as I am CEO of this company! NO EXCUSES!” - John Legere, T-Mobile.com
Now, the Communications Workers of America (CWA) has released a statement claiming that they tried to tell T-Mobile about this cramming practice. In a released statement, the CWA notes that in January 2013 they approached T-Mobile’s parent company Deutsche Telekom to alert them that T-Mobile US managers were “directing workers to add charges to customer accounts.”
The CWA then claims that T-Mobile fired a number of front-line employees who said they were working under direct orders from managers. CWA also states that at a T-Mobile shareholder meeting in June 2013, a CWA activist spoke directly to former Deutsche Telekom CEO Rene Obermann and current T-Mobile CEO John Legere about T-Mobile cramming issues and got nowhere.
I still am left to wonder why exactly that the FTC is not also going after AT&T and Verizon for cramming actions in the not-so past. As Karl Bode notes over at DSLReports, AT&T flat out lied to the New York Times when asked whether they profited from cramming charges:
Why does AT&T allow Wise Media to show up on its bills? Is it because AT&T is taking a cut of the revenue generated by Wise Media?
Nope, said (the AT&T spokesperson).
Really, asked the Haggler?
Really, said (the AT&T spokesperson).
Could you double-check that, (we asked)?
She could, she said.
The next day she sent this e-mail, also quoted in its entirety:
“AT&T has no further comment at this time.” - New York Times
AT&T and Verizon have faced numerous class actions lawsuits due to cramming complaints. Several years ago, it took a little push from Congress to get AT&T and Verizon to no longer allow third party charges on landline networks and even that only occurred three years ago.
Of course, AT&T and Verizon love to tell people that they stopped this practice “voluntarily” while in reality they were forced to stop the practice after receiving billions and billions in illegal charges.