Yesterday, T-Mobile proudly announced that from July to September, they would no longer allow third-parties to bill customers for Premium SMS services and wanted to be “proactive” in protecting customers. T-Mobile noted that some Premium SMS vendors were acting irresponsible by charging T-Mobile customers with unauthorized fees (usually around $10 per month).
“If you’ve been charged for a third-party service you didn’t sign up for, it should be easy to get a refund,” said Mike Sievert, Chief Marketing Officer for T-Mobile. “If customers were charged for services they didn’t want, we’ll make it right. That’s being the Un-carrier.” - T-Mobile Newsroom
Sounds great! Except, when you realize how much T-Mobile (and others) have benefited from these Premium SMS services, the “proactive” approach comes off as rather laughable.
Last year, Vermont Attorney General William Sorrell announced that AT&T, Sprint and T-Mobile had struck an agreement with forty-five states to stop billing from these same Premium SMS services (or as he put it “scam artists“).
According to a Federal Trade Commission complaint from last year, one company would sign up consumers all over the country for a $10 a month service that sent text messages containing a variety of news/tips/horoscopes. The company then tried to confuse the charges on customers bills, ignore requests to be removed and dodge any attempts to be contacted.
“The concept of ‘cramming’ charges on to phone bills is a not a new one,” said FTC Chairwoman Edith Ramirez. “As more and more consumers move to mobile phones, scammers have adapted to this new technology, and the Commission will continue its efforts to protect consumers from their unlawful practices.” - FTC.gov
As Karl Bode noted last year, AT&T was asked about this premium service company in a New York Times story and initially tried to claim that they didn’t profit from premium services. Yet, according to some reports, AT&T, Sprint, and T-Mobile made millions off these scams who were costing customers roughly two billion dollars per year. Carriers did not do anything about the fraud for years because they received a cut of the profit, often as high as 40%.
Then two years ago, AT&T and Verizon became the first to ban the cramming done by these premium services……but only for landlines.
So, last year after making many millions of dollars off these premium services, AT&T, Verizon and T-Mobile agreed to to stop billing for such SMS messages.