FTC Alleges T-Mobile Crammed Bogus Charges onto Customers’ Phone Bills(ftc.gov)
ftc.gov
FTC Alleges T-Mobile Crammed Bogus Charges onto Customers’ Phone Bills
http://www.ftc.gov/news-events/press-releases/2014/07/ftc-alleges-t-mobile-crammed-bogus-charges-customers-phone-bills
5 comments
It's not just billing that is the problem. These third-party services send the carrier a list of numbers to subscribe, and the carrier simply takes them at their word that those numbers have opted in, without having any idea whether this is actually true.
Technically, the third-party could simply make up a list of random (but valid) numbers, send them to the carrier to subscribe, and the carrier would do it. There is no technical means in place to stop this. The only thing that (in theory) stops it is the carrier noticing the high number of customer complaints and deciding not to do business with the third-party any more - a clear conflict of interest, since deciding to ignore the problem benefits the carrier financially.
What many of these services do is toe the line, by enticing a customer to give up their phone number for some completely unrelated reason, and bury somewhere in the fine print that they are signing up for a recurring charge on their phone bill. The customer has absolutely no idea that this is happening unless they read through pages of legalese. This way, the charges are technically opt-in, even though no reasonable person would describe it as such.
https://en.wikipedia.org/wiki/Cramming_(fraud)
The brain-dead simple technical solution for this is for the carrier to check with the customer before adding a charge to the bill. There is no reason not to do this.
Or maybe just get rid of for-pay SMS services altogether. In the age of smartphones they are useless.
Technically, the third-party could simply make up a list of random (but valid) numbers, send them to the carrier to subscribe, and the carrier would do it. There is no technical means in place to stop this. The only thing that (in theory) stops it is the carrier noticing the high number of customer complaints and deciding not to do business with the third-party any more - a clear conflict of interest, since deciding to ignore the problem benefits the carrier financially.
What many of these services do is toe the line, by enticing a customer to give up their phone number for some completely unrelated reason, and bury somewhere in the fine print that they are signing up for a recurring charge on their phone bill. The customer has absolutely no idea that this is happening unless they read through pages of legalese. This way, the charges are technically opt-in, even though no reasonable person would describe it as such.
https://en.wikipedia.org/wiki/Cramming_(fraud)
The brain-dead simple technical solution for this is for the carrier to check with the customer before adding a charge to the bill. There is no reason not to do this.
Or maybe just get rid of for-pay SMS services altogether. In the age of smartphones they are useless.
Premium SMS is already gone: http://venturebeat.com/2013/12/12/premium-sms-billing/
The UK has a regulator that would go after these companies. Any telco that was seen to be coluding with these dodgy companies (even by just ignoring some complaints) would face heavy duty regulation and large fines.
The UK regulator in this area has a reputation for failing to act on complaints and being too close to the industry it's meant to be regulating, as I recall.
Edit: We've had similar problems in the UK for years: http://www.bbc.co.uk/newsbeat/17489393 I don't think most of the customers scammed ever saw refunds, and PhonepayPlus (the industry regulator's) fines are basically slaps on the wrist that are far less than the scammers' profits. Don't think there's ever been any equivalent of the FTC lawsuit over here.
Edit: We've had similar problems in the UK for years: http://www.bbc.co.uk/newsbeat/17489393 I don't think most of the customers scammed ever saw refunds, and PhonepayPlus (the industry regulator's) fines are basically slaps on the wrist that are far less than the scammers' profits. Don't think there's ever been any equivalent of the FTC lawsuit over here.
How is that T-Mobile's fault, though? Don't give out your phone number. Don't give out your Social Security Number. This seems like common sense to me.
Your phone number is public information so keeping it private is hardly on most peoples minds.
This would basicly be the same as CC companies deciding your name and the last 4 digits of your CC number is suddenly enough to sign you up for crap.
This would basicly be the same as CC companies deciding your name and the last 4 digits of your CC number is suddenly enough to sign you up for crap.
I would never in a million years sign up for an SMS service like that, yet I have been signed up for things like that no less than three times during the several years I have been a customer of T-Mobile. I have just managed to catch the charges on my bill. T-Mobile's customer support has always been accommodating, and in most cases, they have been able to refund my money. They will also put a block on your account for "premium services" if you ask them to.
I am T-mobile customer as well, and it happened multiple times to me. Every time I think it was refunded, but it was a big hassle. I can easily imagine less savvy customers getting ripped off for hundreds of dollars over time. T-mobile was definitely not putting the customer first, and now it sounds like they had hundreds of millions of incentives not to.
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Reaction from T-Mobile USA: http://newsroom.t-mobile.com/news/our-reaction-to-the-ftc-la...
Of course this would happen just as T-Mobile is succeeding in branding itself as actually being reasonable...
I'll be interested to see how they handle PR
I'll be interested to see how they handle PR
Is it possible the other carriers are pulling the FTC's strings?
Is it not more likely that there have been more complaints regarding T-Mobile because their customers are more apt to notice these things? Squeaky wheels get greased and the people who have signed up for T-Mobile are all holding oil cans. After all, they switched under the assumption that they could get away from hidden charges.
Perhaps the FTC is just going after them because as the smallest carrier they have less legal resources than AT&T or Verizon.
Perhaps the fraud rate is higher than the other carriers.
Perhaps the fraud rate is higher than the other carriers.
Wouldn't be a shocker.
Imagine if app developers told apple which customers had downloaded and purchased their apps using only the customers phone number and apple just billed them.
Still cheaper than all the other carriers.
If I want horoscopes sent to me each morning and I'm willing to pay $9.99/month, it isn't T-Mobile's job to determine that I should be protected from myself.
That said, their website UI around billing is horrible.