FTC Hits T-Mobile with Hefty Lawsuit
T-Mobile has been hit with a lawsuit from the Federal Trade Commission (FTC). The lawsuit alleges that T-Mobile was charging customers for “Premium” SMS subscriptions that, in a majority of cases, were never authorized by the customer. T-Mobile is also being accused of keeping 35-40 percent of the profits, and as a result made hundreds of millions of dollars over the years from the bogus charges.
At an average cost of $9.99 per month, T-Mobile customers received SMS services that included horoscope information, celebrity gossip and flirting tips that were never authorized to be sent. John Legere, T-Mobile’s CEO, responded by saying the FTC is sensationalizing the issue. Legere wrote in a post, “T-Mobile has in the past and will continue to keep our pledge to bill customers only for what they want and what they have purchased for as long as I am CEO of this company! NO EXCUSES!” He also included that T-Mobile is launching a program later this month to reimburse customers who were charged for the “Premium” services.
Although under fire now, T-Mobile wasn’t the only provider that charged its customers for similar services without consent. Back in November 2013, AT&T, Sprint and T-Mobile entered into an agreement with 45 states to stop charging customers for premium SMS messages they receive. The only exceptions are text-to-donate for charitable programs and text-to-contribute for political campaigns. T-Mobile claims that they discontinued the charges a while ago, however customers continued to send complaints regarding the unwanted, “Premium” services.
The courts will have the final decision, but in the meantime T-Mobile will have to deal with some serious damage control.
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