The Federal Trade Commission announced Tuesday it has filed a formal complaint against phone service provider T-Mobile for bilking customers out of hundreds of millions of dollars by quietly putting extra charges on cell phone bills for “premium” phone service that was, in the overwhelming majority of cases, totally falsified.
The complaint essentially states that T-Mobile knowingly engaged in “third part billing,” a method also known as “cramming.” In doing so, the phone company allegedly charged customers on behalf of another company while earning a kickback from the services charged.
Example of the “premium” services outlined by the FTC include subscription content that provided flirting tips, celebrity gossip, or horoscope predictions. The fee generally cost $9.99 per month, with T-Mobile continuing to bill its customers for the services rendered years after learning that it was happening.
“It’s wrong for a company like T-Mobile to profit from scams against its customers when there were clear warning signs the charges it was imposing were fraudulent,” FTC Chairwoman Edith Ramirez said in a statement. “The FTC’s goal is to ensure that T-Mobile repays all its customers for its crammed charges.”
T-Mobile received any amount up to 40 percent of the total charged to consumers, with the FTC interpreting the massive number of customer complaints as a clear sign that the charges were never authorized by T-Mobile customers. Customers who did not request a refund were simply overcharged every month.
The FTC explained that when customers discovered they were paying for services they didn’t actually want, T-Mobile in many cases failed to provide customers with full refunds. Indeed, the FTC charged that T-Mobile refused refunds to customers, offering only partial refunds of two months’ worth of the charges to others, and in other cases instructed consumers to seek refunds directly from the scammers -- without providing accurate contact information to do so.”
These allegations come to light less than two weeks after T-Mobile CEO John Legere rankled the audience at a press event by demonizing T-Mobile’s competitors because of their willingness to do anything to benefit the bottom line.
“These are high-and-mighty duopolists that are raping you for every penny you have,” he said. “The f---ers hate you.”