FTC lawsuit says T-Mobile earned 'hundreds of millions' through fraudulently charging customers

T-Mobile has reinvented their business by branding themselves as the 'Un-Carrier', fighting for the rights of the consumer against heavy handed and restrictive wireless contracts and data fees. But they haven't always been as peachy as their marketing team makes them out to be:  According to a lawsuit filed by the FTC, T-Mobile has been accused of conspiring with third-party texting services -- like horoscopes, gossip columns, and 'flirting tips' -- to cram fraudulent charges into the bills of unwitting consumers.

The lawsuit was filed by the FTC on Tuesday, in a claim which targeted T-Mobile for a practice known as 'cramming'; one which the FTC says has earned the service provider "hundreds of millions of dollars" in fraudulent charges since 2009. T-Mobile CEO John Legere issued a statement in defense of the company, saying that the alleged misconduct hadn't happened for over a year.

As the Un-carrier, we believe that customers should only pay for what they want and what they sign up for. We exited this business late last year, and announced an aggressive program to take care of customers and we are disappointed that the FTC has instead chosen to file this sensationalized legal action.  We are the first to take action for the consumer and I am calling for the entire industry to do the same.

Although Legere says the practice of falsely charging consumers hasn't happened since 2013, the FTC still seeks to recoup any losses taken by consumers during the period which it took place. If the filing goes through, a court will determine in the future whether T-Mobile will be forced to pay back all of the customers which it had falsely billed over the past four years. 

Source: USATodayImage via Shutterstock - T-Mobile in NYC

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damn..

People should stop taking contract in the greed of that shiny new iPhone or Galaxy and buy a basic smart phone but in PAYG format !!!

That would screw those over charging monsters !!

I bought my Galaxy S5 off contract. The look at the face of the customer rep was priceless. It is funny how they react, which is normally followed by a deplorable display of poor arithmetic by trying to prove that a contract is cheaper. :D

T-mobile charged my account in 2013 for a 3rd party service I never signed up for. I called and made them remove it, then afterward I wondered if they do it intentionally just because they know a lot of people will pay their bill without even looking at it. I guess now I have my answer.

...and we are disappointed that the FTC has instead chosen to file this sensationalized legal action.

I'm curious whether this person could clarify exactly what part of it has been sensationalized. :/

zhangm said,

I'm curious whether this person could clarify exactly what part of it has been sensationalized. :/

From reading from other sites, these are 3rd party charges. Last year T-Mobile said they were stopping all those charges and customers could file for a refund if they think they were charged for them in error or unknowingly.

I think the worst thing about it is they have a lawsuit against T-Mo but Verizon, ATT, and Sprint both do these things, T-Mo has stopped the practice and has a plan in place to remedy it, there is no world on whether or not Comcast will buy TMC, and there is no world on net neutral. That just names a few of the bigger events that the FTC should be focusing on. Not an old, remedied practice that has stopped AND that other carriers are doing currently, right now!

But thats my opinion.

"the alleged misconduct hadn't happened for over a year." ... and that somehow makes it alright? customers are just supposed to sit back and say "oh, since they're not doing it anymore, we'll forgive them"?

T-Mobile CEO John Legere issued a statement in defense of the company, saying that the alleged misconduct hadn't happened for over a year.

Thats like saying "Well I did burglarize your home between 2009 and 2013 constantly without being caught, but I haven't for the past year!" :s

Steven P. said,

Thats like saying "Well I did burglarize your home between 2009 and 2013 constantly without being caught, but I haven't for the past year!" :s

Its all conspiracy