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T-Mobile To Pay $90M For Unauthorized Charges On Customers' Bills
itwbennett writes T-Mobile US will pay at least $90 million to settle a Federal Communications Commission (FCC) suit that alleged it looked the other way while third parties charged T-Mobile subscribers for services they didn't want. The settlement is the second largest ever for so-called 'cramming,' following one that the FCC reached with AT&T in October. It came just two days after the Consumer Financial Protection Bureau sued Sprint for the same practice.
The carrier must pay at least $67.5 million to fund a program to pay its customers back, plus $18 million to state governments participating in the settlement and a $4.5 million penalty paid to the U.S. Treasury. If consumers’ claims go higher, T-Mobile will have to pay them, with no upper limit. Consumers who believe they were wrongly charged will be able to apply for refunds at a website set up for the purpose. That site was not immediately available.
I started getting text messages on some celebrity quiz game but was just deleting them until I finally got tired of them. I looked the company up online and saw where people were complaining about getting slammed and charges showing up. I checked my bill and sure enough - there were the charges. I hadn't noticed them because they were down a couple of extra layers under something like "miscellaneous charges". I called T-Mobile to stop it and get the charges refunded but they had me contact the charging company to dispute and the charging company would only refund a couple of months. This had been going on for about 5 months. I called T-Mobile and insisted on total refunds and just got a runaround. I called my Senator and told his staff about it. They intervened and T-Mobile contacted me and gave me a full refund. The Senator's staff contacted me again and asked if I minded if my case data was used in their investigation and I told them not at all. Looks like it has all finally bore fruit.
The company - I would have to check my files for the name - said I had visited some web site and signed up for their celibrity quiz game. I had a static IP address at the time and sure as shit, they had it. I had apparently visited a site that was simply harvesting IP addresses, or somehow they associated my IP with my name. I would never sign up for some celebrity quiz. It was a simple slam.
Glad they all got nailed!
Remember when the Republicans in Congress fought against the creation of the Consumer Financial Protection Bureau? This is why.
The CFPB was actually proposed by Elizabeth Warren, then still at Harvard. She was Obama's first choice for its Director, but her appointment was blocked.
In my case it was $9.99 per month for 5 months but my Senator got T-Mobile to refund all of my money back when this happened after I asked his office for help when I discovered the charges and got the runaround from T-Mobile when I demanded a refund.
I dealt with this several years ago. I found the charges on my bill and called to have them removed. It showed up the next month too. After speaking, at length, with the T-mobile rep it made sense. T-mobile allowed you to purchase apps through your account. But these companies would get your number and just start charging you. Apparently many people don't look at their bills and don't notice changes for a couple dollars. Particularly if the company name is worded to look like part of your bill. I asked them to disable being able to bill my account directly and the problem was solved.
Why not fine them as well for illegal charging people when they didnt consent??
A penalty that stands a chance of getting the offender's attention, rather than one that's considered simply a cost of doing business. The fine should have been higher though - perhaps an additional $90M as purely punitive damages. Companies need to learn that wilfully screwing over their customers really, really hurts their bottom line. Also, an award approaching a fifth of a billion would likely piss off enough shareholders that several heads would roll.
'The Economy' is a giant Ponzi scheme whose most pitiable suckers are the youngest among us and the yet-unborn.
Consumers who believe they were wrongly charged will be able to apply for refunds at a website set up for the purpose.
So pretty much T-Mobile could have made hundreds of millions of dollars off of this, but they won't have to pay more than $67.5 million of it unless people realize they were being overcharged, and go to the trouble of applying for a refund. How many people will actually do that? Most people who were wrongfully charged probably don't even realize, especially when it's tucked in between the various ridiculous "fee" line items on the bill. And even if people do realize they are being wrongfully charged, and even if they do know where to go to apply for a refund, unless it's a significant amount most won't bother because either they'll "get around to it later" or figure the slim chance of actually collecting isn't worth their time and hassle.
There should have been a few more million added to hire a team of forensic accountants.
Yeah, it's unfortunate -- a few bucks probably doesn't matter to average Joe, so it's not worth persuing...but there are many millions of average Joes, which really makes it worthwhile for T-Mobile, etc.!
Here in Australia, when a company acts fraudulently, they're pretty much forced to declare their misdeed to all their customers, and to go through all the necessary steps to make it right. For instance, when Coles got spanked for calling their bread fresh baked daily, and when it came out they were baking from partially baked and frozen, they had to put several notices on the wall behind their breads spelling out in great detail what they did wrong. Every detail including the placement, frequency, and wording were ordered by the court.
In T-Mobile's case, the court should have (and perhaps actually) ordered them to mail and email every potentially affected customer with details on how to apply credits to their account online, and every affected prior customer to claim a refund online using account number and mailing address to verify. In cases where the actual damage amount can be determined, credits and refunds should be automatic. Anything that requires jumping through one hoop too many is egregiously odious. Ah well one can dream.
I dealt with this several years ago. I found the charges on my bill and called to have them removed. It showed up the next month too. After speaking, at length, with the T-mobile rep it made sense. T-mobile allowed you to purchase apps through your account. But these companies would get your number and just start charging you. Apparently many people don't look at their bills and don't notice changes for a couple dollars. Particularly if the company name is worded to look like part of your bill. I asked them to disable being able to bill my account directly and the problem was solved.
I went through this several times with Verizon. I disabled all billing through my account, but apparently every time you get a new phone, change your rate plan, or a mouse farts, the option gets switched back on.
In many cases, such as my stepson's, they are aiming these services at kids, because they know they have trained well this generation of kids to not read the fine print. By texting "funny" to some number they can get a corny joke sent to their phone once a day and they don't even realize that it is costing $10 a week because they didn't read the fine print. Nevermind that kids are not able to enter legal contracts and are under no obligation to pay.
Basically, if the phones are offering these billing services, they need to be regulated under the same rules as a credit card, in addition to the regulations of the phone services. Basically, they are currently acting as a credit card without having to follow the same regulations. Since they are not acting as a mere facilitator, as a credit card company would, they feel no obligation to side with the consumer on a complaint. If a CC company sides with a consumer and reverses the charge, they make MORE money. If the phone company reverses the charge, they lose not just their 20-40% cut of the scam, but the entire amount, unless they have agreements with the scam companies that allow reversing the charges to them.
If you are not allowed to question your government then the government has answered your question.