Several weeks ago, Android Authority wrote about T-Mobile issuing a statement proclaiming that they were being “proactive” in stopping ‘Premium SMS services’ all the while leaving out how T-Mobile (and others) have benefited from these same services for years.
Then two days ago, the Federal Trade Commission filed a complaint alleging that T-Mobile made hundreds of millions of dollars off these services and purposefully made it as hard as possible for consumers to get refunds from these services.
T-Mobile’s CEO John Legere decided to respond to the recent complaint by blaming just about everyone else including the FTC, other carriers and the third party providers. In his response, Legere mentions that the “real bad actors” were getting off while T-Mobile was being “proactive” by stopping such services a year ago. He also lays blame on the FTC for “sensationalized legal action” and claims that the “entire industry” needs to make changes.
I agree with Legere that T-Mobile has made a number of pro-consumer and industry-changing moves since he took over T-Mobile. But, the notion that T-Mobile made immediate changes and has been simply looking out for the consumer is laughable and wrong.
First, T-Mobile has been engaged in this practice for years now. The FTC notes in the complaint that T-Mobile was involved in this scam from 2009 up until December of last year. But, a basic internet search can find a number of T-Mobile cramming stories dating all the way back to 2006.
In 2008, T-Mobile was involved with a class action lawsuit over wireless cramming charges where it was alleged that T-Mobile was continuing to allow third-party companies to charge customers for services that customers never requested.
“Defendant T-Mobile caused plaintiff Moore’s cellular phone to include the unauthorized charge of $9.99 per month for Ringazza, and similarly caused plaintiff Butler’s cellular phone bill to include the unauthorized charge of $9.99 for Flycell. In doing so, defendant T-Mobile omitted necessary information from plaintiffs’ cellular phone bills that was required by [California statute], including the means to contact the offending third-party company, such as a toll free number.” – RCRWireless
In 2010, the Florida Attorney General’s office had to threaten T-Mobile to get them to stop telling customers that cramming charges were “sales” by third parties and therefore not their own fault.
Florida Attorney General Bill McCollum said T-Mobile will continue its practice of issuing credits and refunds to consumers for unauthorized charges for third-party mobile content subscription purchases. McCollum said a large number of complaints about cramming led to an investigation which revealed that thousands of Florida consumers had received these charges on their cell phone bills for mobile content downloads that they neither knowingly authorized nor wanted.
As part of the settlement, the company will pay a total of $600,000 to reimburse the state for the costs of its investigation and to help the Attorney General’s Office fund the efforts of the CyberFraud Section as it continues working toward similar reform across the industry. – Consumer Affairs
In 2012, a Baltimore Sun writer discussed his issues with T-Mobile adding over $350 worth of charges to his bill in not even a year.
I spent the better part of a recent staycation day on the phone with various people at the other end of 800 numbers, trying to figure out why my phone was being charged $19 here and $9.99 there, monthly, for “text alerts” and “text subscriptions” and “text trivia.”
The T-Mobile representative I spoke with on the phone said she could not refund me any money; she could only offer to block future texts. (I learned, by the way, that the block option was always there, but customers have to ask for it.) The T-Mobile representative gave me six 800 numbers to call, each of them to third-party companies that had charged me for unauthorized text messages. I was told I’d have to call each of them to demand a refund.
So that was fun. – Baltimore Sun
The writer eventually spoke to T-Mobile’s media relations department who gave him the same line that T-Mobile has given for years with wireless cramming.
“T-Mobile provides customers with the ability to purchase various services and products from certain third-party service providers (e.g., games, apps, ringtones, etc.) and have the charges for those services or products included on your T-Mobile bill. Third-party charges that appear on a customer’s wireless telephone bill are those charges that the customer affirmatively authorizes prior to the processing of the charge on the bill.” – Baltimore Sun
In fact, 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. In March of this year, Sen. Jay Rockefeller (D-W. Va.) sent letters to AT&T, Verizon, Sprint and T-Mobile warning them that they needed to crack down on wireless cramming.
“I am deeply disturbed by the FTC’s allegations that T-Mobile allowed millions of dollars in unauthorized charges to be crammed on consumer wireless bills,” said Rockefeller in a statement. “The FTC’s allegations only heighten my concern about the industry’s repeated assertions that voluntary oversight effectively protects consumers from cramming.” – Washington Post
Legere is absolutely correct that other carriers are as much to blame. AT&T tried to claim that they were not profiting off these services yet as a New York Times story notes, AT&T/Verizon/T-Mobile made millions off these scams since the carriers were receiving a cut of the profit.
As one site notes, “Legere’s statement comes off a bit like the whiny kid whose bully friends put him up to stealing one cookie while they made off with the bag, but regardless, if T-Mobile is in fact “the most pro-consumer company” out there, we’d hate to see what the rest of them have been up to in comparison.”
Again, I do not doubt that Legere has pushed hard to end this practice since he took over T-Mobile. That is not the argument at issue. Legere is arguing that T-Mobile is and will be proactive when it comes to cramming. Yet, T-Mobile has known about this issue for years now and made many millions off this scam. Whether Legere was in charge of T-Mobile or not, there is nothing pro-active about T-Mobile stopping the cramming services. Period.
Maybe AT&T and Verizon are just as guilty. I don’t think that is really something that anybody would disagree with based on their shady billing histories. Unfortunately for T-Mobile, their history with cramming suggests that they need to look into the mirror and fix this almost decade-old problem.
(Updated – T-Mobile’s CEO issues another response – http://newsroom.t-mobile.com/issues-insights-blog/doing-right-by-consumers.htm)