FTC, T-Mobile at loggerheads over cramming charges
It appears T-Mobile may have been using billing tactics that made it difficult for customers to see exactly what they are paying for and the result has been a federal lawsuit against the mobile carrier by the Federal Trade Commission (FTC) over what is reportedly "hundreds of millions of dollars" the company took from customers. The lawsuit comes as Sprint is aiming to take over the carrier in order to deliver to Americans a viable third option aside from AT&T and Verizon.
The FTC has said that third-party text messaging services reportedly were billing users around $9.99 monthly for services that included horoscopes, dating advice and other information. While these services are fine and legal, with T-Mobile taking in around 40 percent of those transactions, the information on consumers' bills appears to be the problem.
Reports indicate that when a T-Mobile user received their monthly bill, the services were jumbled in language and hard to find. One report suggested that the strange billing labels for the service included something like: "8888906150BrnStorm23918." This is called "cramming" and it has become apparent that T-Mobile was able to bring in extra revenue without their customers understanding fully what they are paying for.
In response, T-Mobile has denied any wrongdoing on its part, and has reportedly stopped their partnerships with premium text services last year. It is currently working to deliver refunds to those customers affected.
T-Mobile's CEO John Legere lashed out at the FTC in an open letter published after the lawsuit was filed, claiming the FTC is going after T-Mobile without cause.
"The FTC certainly did a good job of sensationalizing their story and their news at the expense of both T-Mobile's reputation and mine," he wrote. "My frontline employees are upset about it and so am I. I considered leaving it alone, but I have to set the record straight."
Legere said that the company has always put the customer first and finds what he dubs an attack on the company as ill-advised. He categorically denied the company was involved in any "cramming."
"First, let me make this very clear. T-Mobile is NOT participating in any form of cramming, stuffing charges for un-purchased services, or trying to be anything less than totally transparent with each of our customers. PERIOD!" he continued.