T-Mobile CEO John Legere says the U.S. Federal Trade Commission is sensationalizing and exaggerating claims that T-Mobile improperly billed customers for premium text-messaging services without their knowledge, a practice known in the industry as “cramming.”
In a blog post this afternoon, the outspoken wireless leader points out that T-Mobile and other carriers ended the practice last year, after being duped themselves by fraudulent service providers. Legere says the FTC is overlooking the steps that Bellevue-based T-Mobile had already taken end the practice, and its efforts to refund customers who were overcharged.
Legere writes, “It is true, that back in 2009 thru 2013, all of the big carriers in the wireless industry, including T-Mobile, began carrying what became known as the Premium SMS services. We were all billing for these services on behalf of the content providers who were responsible for obtaining the customers’ authorizations.
He continues, “As we all know now, there were some fraudsters in that bunch. That is why, as we found them, we terminated them and, ultimately, made the decision in November 2013, as did all four of the wireless companies, to eliminate this from our service offerings. FULL STOP!”
Legere adds, “Despite the exaggeration of the FTC, this was neither a big nor important business for us, and their financial claims are incredibly overstated. Additionally, those third-party content business operators are pretty much out of business. This was an easy Un-carrier decision!”
This is the second in a pair of public-relations problem faced by T-Mobile in recent weeks, the first being Legere’s own comments during the company’s recent “Un-Carrier 5.0″ event. T-Mobile has otherwise been on a roll as a company, adding millions of customers over the past year.
Legere writes today, “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. My frontline employees are upset about it and so am I. I considered leaving it alone, but I have to set the record straight.”
As reported earlier this week, the FTC alleges in its complaint that T-Mobile ignored warning signs that would point towards fraudulent charges. The company allegedly charged customers for services from providers even after those companies were the subject of industry alerts, law enforcement actions and other legal actions. The FTC argued that T-Mobile hid the charges deep inside consumers’ monthly bills, which made people less likely to notice they were paying for something they didn’t want.
Legere, in his post today, pointed to the company’s previous discontinuation of the charges, and its efforts to refund customers, an initiative launched on June 10.
He writes, “To make sure we are doing all the right things, I have instructed our marketing and customer care teams to double down their outreach effort to all potentially affected customers – current and past – who believe that they were inappropriately billed and/or paid for one of these Premium SMS services that they did not want or authorize – and provide refunds. This program is being launched in a few days. DOING WHAT IS RIGHT!”
Read his full post here.