FTC accuses T-Mobile of charging customers for unauthorized premium SMS services [UPDATED]

Alex Wagner
Editorial Director of News and Content from  Omaha, NE
| July 1, 2014

T-Mobile CES 2013

T-Mobile is known for making some big Uncarrier moves, including its iPhone 5s Test Drive and Music Freedom programs. T-Mo is back in the headlines today, but this time the news is unlikely to get you super excited.

The Federal Trade Commission is accusing T-Mobile of charging its customers for premium SMS subscriptions that, for the most part, were not authorized by the users. According to the FTC, T-Mobile made around 35 to 40 percent of the amount charged to its subscribers for these services, and in some cases T-Mo may have continued to bill its users after learning that the charges were fraudulent. 

The FTC goes on to claim that T-Mobile received a large number of consumer complaints regarding premium SMS billing as far back as 2012. However, the FTC says that T-Mobile made it difficult for consumers to know that they were paying for these services by hiding the charges deep within menus online and failing to fully explain what the charges were for.

T-Mobile CES 2014

Finally, the FTC suggests that some consumers that did figure out about the premium SMS billing failed to get full refunds. It’s said that T-Mo only gave partial refunds in some cases, refused refunds in others and even told some customers to ask the scammers themselves for refunds.

The FTC’s claims would be major news on their own, but what makes these claims even more interesting are T-Mobile’s recent efforts to fight premium SMS billing. In 2013, T-Mo put an end to most premium SMS services, and earlier this year the carrier worked to help customers seek out refunds for any SMS services that they may have been charged for.

It’s worth noting that the FTC’s accusation isn’t yet confirmed. If you’re a T-Mobile customer, though, it’s worth diving deep into your recent bills to see if you may have been charged for premium SMS services that you didn’t want. Stay tuned and I’ll update you when T-Mobile issues a statement on this matter.

UPDATE: T-Mobile has issued an official statement regarding the FTC’s accusations. T-Mo says that the complaint is “unfounded and without merit,” explaining that it’s working more than any other carrier to change how the wireless industry works.

T-Mobile goes on to say that while it took steps to prevent its customers from getting unwanted SMS charges, not all of the companies acted like they should have. The magenta carrier finishes by describing the FTC’s lawsuit as “misdirected” and “factually and legally unfounded.” The full statement is available below.

Our Reaction to the FTC Lawsuit

We have seen the complaint filed today by the FTC and find it to be unfounded and without merit.  In fact T-Mobile stopped billing for these Premium SMS services last year and launched a proactive program to provide full refunds for any customer that feels that they were charged for something they did not want.  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.

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.

This is about doing what is right for consumers and we put in place procedures to protect our customers from unauthorized charges. Unfortunately, not all of these third party providers acted responsibly—an issue the entire industry faced.  We believe those providers should be held accountable, and the FTC’s lawsuit seeking to hold T-Mobile responsible for their acts is not only factually and legally unfounded, but also misdirected. 

-- John Legere, CEO of T-Mobile USA

Via Federal Trade Commission (PRNewswire), T-Mobile