For all its CEO's claims, T-Mobile might not be any less shady than its rivals
T-Mobile has spent a lot of time trying to convince consumers that it's better than its competition. It has promised to offer better wireless networks than Verizon or AT&T. It partnered with Apple to bring the iPhone to its network. Its chief executive, John Legere, regularly calls out his competition without hiding his disdain behind vague remarks. In a world where wireless carriers are a necessary evil, T-Mobile was trying to break the mold.
Maybe we should have known that T-Mobile's claims were too good to be true. The Federal Trade Commission today alleges that the carrier has allowed its customers to be scammed with extraneous services, from which it received up to 40 percent of the revenues, and only partly refunding the charges from those services instead of trying to protect its customers.
After describing the difficulty with which a consumer could figure out if they were being charged for services they neither wanted nor used -- the carrier's monthly bills are said to be almost 50 pages long -- the FTC explained T-Mobile's unwillingness to help its customers:
When consumers were able to determine they were being charged for services they hadn’t ordered, the complaint alleges that T-Mobile in many cases failed to provide consumers with full refunds. Indeed, the FTC charged that T-Mobile refused refunds to some customers, offering only partial refunds of two months’ worth of the charges to others, and in other cases instructed consumers to seek refunds directly from the scammers – without providing accurate contact information to do so.
The complaint also notes that in some cases, T-Mobile claimed that consumers had authorized the charges despite having no proof of consumers doing so. Funnily enough, Legere attacked his competition for their pricing practices in 2013:
John Legere kicked off T-Mobile's event in New York City today with an unrelenting tirade against the carrier's competitors. "Stop the bullshit," the CEO said, referring to the traditional subsidy model being pushed by Verizon, AT&T, and Sprint. "Carriers are really nice to you... once every 23 months," teased Legere, in a no-nonsense presentation even more aggressive than his speech at CES earlier this year. "This is the biggest crock of shit I've ever heard in my entire life. Do you have any idea how much you're paying?"At least he had a point -- T-Mobile's customers did know how much they were paying. They just didn't know who they were paying, why they were paying them, or how they could stop paying them even after they made their way through the company's obscenely convoluted billing statements and its legion of customer support workers who apparently couldn't help them get the charges (which just happened to line its own pockets) removed from their bills.
Consider the mold -- and a basic sense of morality -- broken. And, much like PayPal before it, T-Mobile's response to this issue doesn't actually address the bulk of the FTC's argument:
As the Un-carrier, we believe that customers should only pay for what they want and what they sign up for. We exited this business late last year, and announced an aggressive program to take care of customers and we are disappointed that the FTC has instead chosen to file this sensationalized legal action. We are the first to take action for the consumer and I am calling for the entire industry to do the same.
This is about doing what is right for consumers and we put in place procedures to protect our customers from unauthorized charges. Unfortunately, not all of these third party providers acted responsibly—an issue the entire industry faced. We believe those providers should be held accountable, and the FTC’s lawsuit seeking to hold T-Mobile responsible for their acts is not only factually and legally unfounded, but also misdirected.