Why T-Mobile botched their response to the FTC filing, and how they can fix it

On July 1st, it was reported that the FTC had filed a lawsuit against T-Mobile accusing the company of cramming false charges into its customers' bills, a process which has allegedly earned them “hundreds of millions of dollars.” According to the suit, the practices took place from 2009 to 2013, and included fees from horoscope and celebrity gossip texting services, which many customers didn't even order. Now, the FTC wants T-Mobile to pay restitution to its customers for the years of false billings -- and unsurprisingly, the company is fighting it tooth and nail.

T-Mobile CEO John Legere was appointed in late 2012, and since then the company has taken a radical new direction. Once a tiny competitor to industry giants like Verizon and AT&T, Legere revitalized not only T-Mobile's business practices but their public image as well; branding the provider as an outspoken advocate for consumer rights, and even sticking the company's neck out with its ‘Un-carrier' plan, which, amongst other things, dropped contracts, overage fees, and even early termination fees. The revamp earned T-Mobile significant praise, and for some, even put the company in the running as a direct competitor to larger service providers.

But T-Mobile's response to the FTC's filing was absent of the goodwill which they had shown the world in the past year. Legere issued a statement to the FTC suit -- which, again, only wants T-Mobile to pay back the money it had fraudulently charged -- calling the filing “sensationalized,” as well as “unfounded and without merit.” The full statement does little more than deflect the claims, instead choosing to target other service providers and boast T-Mobile's “commitment to consumers” which it has worked so hard to develop.

T-Mobile is fighting harder than any of the carriers to change the way the wireless industry operates and we are disappointed that the FTC has chosen to file this action against the most pro-consumer company in the industry rather than the real bad actors.

Legere's response was little more than adolescent whataboutism, something you might expect a small child to say after he was caught by his parents doing something he shouldn't have. “But those other companies did it too! Why am I being punished?” Instead of taking responsibility and owning up to the fraudulent charges, Legere and T-Mobile decided to redirect blame. The tactic is laughably transparent, and in the long run it will bring the company a tremendous amount of trouble -- far more so than if they actually owned up to their actions. The entire ‘Un-carrier' name they've built over the past year? The suit might not destroy it entirely, but it will undo a great deal of the work Legere and T-Mobile have put in.

It's hard to stop the train of bad press now, but T-Mobile can still rectify it. The alleged billing policy happened from 2009 to 2013, and Legere only became CEO in late 2012. That means it was put in place by his predecessor, far before the ‘Un-carrier' was even imagined, and far before T-Mobile had reinvented themselves as a pro-consumer company. Legere could easily take responsibility while still distancing himself and his company from the practice. A simple acknowledgement would easily do the trick -- then a reference to T-Mobile's commitment to progress, and to making things right with the customer. The non-specific “hundreds of millions of dollars” claimed by the FTC to be owed would seemingly make a large dent in T-Mobile's funds, but that number shrinks in significance considering how much the company has grown in 2013 alone: 4.4 million new customers, and a revenue of $24.42 billion. With a savvy legal team, the potential restitutions could be argued down even more. And the goodwill provided by a proactive move to make things right? Innumerable.

As it stands, T-Mobile's corporate spewings are still very distant from the image they've built on the public end of business. While they may say that they're pro-consumer, the company is still like any other telecommunications giant at its core. But Legere and the rest of the corporate team can change that with a few simple actions, and launch a pro-consumer track record that supports all the hype they've created on the frontend.

Image via Wikipedia

Report a problem with article
Previous Story

‘Inhumane' treatment continues at Samsung factories

Next Story

Microsoft issues fix for yesterdays updated Windows Phone 8.1 Calendar app


Commenting is disabled on this article.

Legere is more up front than any other CEO. I doubt he had full knowledge of this, otherwise he would have acted to rectify it.

I think Legere's response is more about being angry. I would bet anything that he feels that he has worked so hard to turn the company around and he has and yet he's being punished for something that he didn't start and yet was still trying to clean up. The fact he mentions its a problem that was plaguing the entire industry points out that everyone, including T-Mobile has had this problem and I agree with him. I still find it funny that T-Mobile is now the one being the most consumer friendly and yet the only one being called out. Something isn't right there. While I do agree that there was probably a more mature articulation of his response to be had but, Legere made good points and I think T-Mobile is being unfairly singled out when all of them have had this problem.

If it were me I'd be blaming my predecessor, but it doesn't seem like it was taken care of in his first year there anyway.

"... absent of the goodwill which they had shown the world in the past year"

US != world. T-Mobile Europe tried to screw its customers over on a regular basis. Most of the time it was successful. The only reason I went with them originally was because of all the carriers at the time they were the least grasping.

Choto Cheeta said,
I kind a agree with T-Mobile.. Why them only, when every does it ??

Bit like a pedo saying the same thing !!!!

i agree with the article they could have turned this around with some goodwill and admissions, the why me when others are doing it is not an excuse, a policeman stopping you for speeding won't rip up the ticket just because the car in front was speeding too.

However i do agree why T-Mobile is penalised, perhaps as well as the goodwill they could generate they could also push for an inquiry in other providers as well? kick the public into asking questions why AT&T and Verizon are doing the same practices (if they are).

To make that analogy a bit more fair, you'd need to say that there are only five drivers on all the roads in the country, and they're all sitting on the shoulder of the road in front of the officer giving him the finger.

Edited by Skwerl, Jul 2 2014, 4:41pm :

Choto Cheeta said,
I kind a agree with T-Mobile.. Why them only, when every does it ??
I personally got ripped off by T-Mobile and I hate them, but to be fair I agree that every one does it.

Really, wikipedia for a dictionary definition?

And the definition doesn't make your ridiculous comparison any more true...

Why not, it's the first thing that comes up in a google search.

Perhaps if you had read the article you would know there is a difference between a comparison and an analogy.