T-Mobile Investigated for Cheating Customers

CWA and TU members at T-Mobile US weren't surprised at the news this week that T-Mobile US is being investigated by the Federal Trade Commission for cheating wireless customers and pocketing hundreds of millions of dollars.

CWA alerted parent company Deutsche Telekom in January 2013 that T-Mobile US managers were directing workers to add charges to customer accounts. Deutsche Telekom ignored this warning. A CWA activist spoke directly to then Deutsche Telekom CEO Rene Obermann and T-Mobile CEO John Legere at the T-Mobile shareholder meeting in June 2013 about this situation. His statement also was ignored.

Now the FTC has stepped in and is suing T-Mobile US for cheating consumers.

T-Mobile US says it stopped billing for these Premium SMS services last year and has launched "a proactive program to provide full refunds for any customer that feels that they were charged for something they did not want." But hundreds of thousands of customers couldn't determine from their T-Mobile bill that they were the victims of fraud, because T-Mobile's complicated billing practices made it nearly impossible for customers to determine that they were being cheated, according to the FTC. And consumers, mainly lower income families, who use pre-paid calling plans do not receive monthly bills, so the fees were taken from their pre-paid accounts without their knowledge and consent. Will these customers also receive a "full refund?"

These third-party charges – often scams or entertainment sources – paid T-Mobile US as much as 40 percent of the monthly fees, the FTC complaint said. And even when it was made clear that charges were fraudulent, according to the FTC, T-Mobile US continued to illegally bill customers for the service.

Separately, the National Labor Relations Board also is investigating T-Mobile US for systemic violations of federal labor law. Complaints have been consolidated into one national case, which could lead to nation-wide remedies for the violations.

In addition to ignoring alerts about T-Mobile's cramming, Deutsche Telekom also chose to ignore an NLRB decision to pursue systematic abuse by T-Mobile US management. At the T-Mobile US annual meeting in June, DT voted its majority (67%) shares against a shareholder resolution that would have required human rights reporting; DT follows those principles in its operations in Germany.

CWA and ver.di, which represents workers at Deutsche Telekom and T-Mobile in Germany, are working to help T-Mobile workers get the union representation they want. Thousands of T-Mobile workers in Germany have joined TU, creating partnerships with their U.S. counterparts, to convince DT that workers' rights abuses at T-Mobile US must stop.