The Federal Trade Commission has filed an official complaint against mobile carrier T-Mobile over the unwanted placing of extra charges on several subscribers’ bills. They are accusing the telco giant of profiting in millions of dollars by not removing these extra charges which the customers were not aware they were subscribed to. T-Mobile denies the charges and have responded strongly against the complaint.
According to the FTC, around 35-40% of what they charge several subscribers, which amounts to around $9.99, comes from extra third-party services like horoscope, gossip items, practical tips, most of which are from scam services. The FTC believes that even after T-Mobile has received numerous complaints from their customers, they failed to act on it and to refund them on these fraudulent charges. Most of the services had a refund rate of 40% in a single month, but they allege that the carrier did not do anything to facilitate that refund. They are accusing the company of making their billing statements too complicated for consumers to realise they are being billed for these unwanted services.
Meanwhile, T-Mobile USA CEO John Legere responded strongly to the complaint, emphasising that it is “unfounded and without merit.” He says that upon discovery of the problems with the premium SMS services last year, they have done whatever they could to stop the overbilling, including establishing a proactive program to refund the customers. He also expressed disappointment that the FTC has chosen to pursue filing this kind of action against them, as he believes they are at the forefront of taking action for the sake of the customer.
FTC Chairperson Edith Ramirez says they are going after T-Mobile because a big company like them should not “profit from these scams.” They are looking at getting a court order to stop the carrier from practicing mobile “cramming”, the term used to describe the act of placing charges on the bill without the consumer’s consent, and also to get the appropriate refunds for the customers on the unauthorised billing.