overages

Two 'overages' stories April 2014 - July 2014

T-Mobile gets socked with an FTC complaint alleging the Uncarrier ‘Crammed Bogus Charges onto Customers’ Phone Bills’

It feels like just last month, TMobile CEO John Legere accused Verizon and AT&T of “raping” (ugh) its customers and that “the fuckers hate you”.

In a complaint filed today, the Federal Trade Commission is charging mobile phone service provider T-Mobile USA, Inc., with making hundreds of millions of dollars by placing charges on mobile phone bills for purported “premium” SMS subscriptions that, in many cases, were bogus charges that were never authorized by its customers…

The FTC alleges that T-Mobile received anywhere from 35 to 40 percent of the total amount charged to consumers for subscriptions for content such as flirting tips, horoscope information or celebrity gossip that typically cost $9.99 per month. According to the FTC’s complaint, T-Mobile in some cases continued to bill its customers for these services offered by scammers years after becoming aware of signs that the charges were fraudulent.

Update: T-Mobile has responded publicly to the complaint saying it is being singled out…

We have seen the complaint filed today by the FTC and find it to be unfounded and without merit. In fact T-Mobile stopped billing for these Premium SMS services last year and launched a proactive program to provide full refunds for any customer that feels that they were charged for something they did not want. T-Mobile is fighting harder than any of the carriers to change the way the wireless industry operates and we are disappointed that the FTC has chosen to file this action against the most pro-consumer company in the industry rather than the real bad actors.

T-Mobile says it will end domestic overages in May, petitions AT&T, Sprint, & Verizon to do the same

Following a number of new initiatives launched last week including its new Simple Starter plan and new perks for tablet users, T-Mobile issued a press release today calling for an end to overages and urging consumers to sign a petition for AT&T, Sprint and Verizon to do the same.

Traditional wireless plans start with a low monthly fee for a fixed amount of domestic minutes, texts or data. Once consumers go over those limits – even by a little – they’re hit with dramatically higher rates and extreme penalties. These plans seem purpose-built to drive customers over that invisible line into massive overage charges.

In the press release, the carrier noted it will end all domestic overages in starting in May for the June billing cycle (something we thought it was doing since the beginning of Uncarrier?). The wording also sounds a lot like it could continue to charge overages for international use. T-Mobile’s new Simple Starter plan does not include the free international perks it unveiled for other plans last year, so it looks like the carrier is giving itself some room to continue charging overages for international use in some cases.

T-Mobile has been doing a lot of talking about ending overages, and its approach might be slightly more transparent than the other guys, but at the end of the day an overage is an overage and even T-Mobile charges some customers for more data. It’s new Simple Starter plan for example which caps at 500MB for LTE data, will force users to purchase $5/day or $10/week “additional data sessions.”

The company’s full press release is below.

T-Mobile Abolishes Consumer Overages,

Challenges Other Wireless Providers to Follow Suit

Legere Starts Petition for Consumers to Call on AT&T, Verizon and Sprint to End Overages

BELLEVUE, Wash. – April 14, 2014 – T-Mobile US, Inc. (NYSE: TMUS) today shifted the national conversation on wireless to a new level, unveiling its latest Un-carrier move – a campaign to eliminate overage penalties, one of the most reviled wireless industry practices. While abolishing overages for all customers on T-Mobile consumer plans, its CEO has also laid down a challenge to the nation’s largest carriers, AT&T, Verizon and Sprint, to do the same.

More than 20 million Americans were hit with punitive overage charges in 2013. And these penalties from the three largest U.S. carriers take more than an incredible $1 billion out of consumers’ pockets every year.

“Today I’m laying down a challenge to AT&T, Verizon and Sprint to join T-Mobile in ending these outrageous overage penalties for all consumers – because it’s the right thing to do,” said John Legere, president and CEO of T-Mobile. “Overage fees are flat out wrong. Agree with me? Join me in putting this challenge to all the major national carriers by signing my petition on Change.org. Right here. Take one minute to be a part of this consumer movement.”

Last year, T-Mobile banished annual service contracts and began phasing out overage charges with the launch of Simple Choice. T-Mobile’s stance against annual service contracts is now well known by consumers, and today it’s taking on the even more unpopular and unjustified practice of slamming consumers with surprise bills in the form of overages charges.

“Charging overage fees is a greedy, predatory practice that needs to go,” continued Legere. “Starting in May for bills arriving in June – regardless of whether you’re on Simple Choice, Simple Starter or an older plan, we’re abolishing overages for good. Period.”

Traditional carriers’ entry-level plans lure customers in with a low monthly fee for a fixed amount of domestic minutes, texts or data. Once consumers go over those limits – even by a little – they’re hit with much higher rates, often dramatically higher. These plans are purpose-built to drive customers over that invisible line into massive overage charges. The result has been a culture of fear, worry and surprise every time the wireless bill arrives. For example, an individual on AT&Ts entry-level plan, advertised at $45 per month, will pay $125 if he uses just the average amount of data for a U.S. smartphone user (1.5 GB per person).

“The worst thing about these overage fees is that they’re often inflicted on those who can least afford them,” added Legere. “As an advocate for consumers, we’re putting a stop to that. I personally won’t be satisfied until we obliterate this shameful practice from the entire wireless industry.”

To give a voice to U.S. wireless consumers, Legere has started an online petition at Change.org/AbolishOverages calling on AT&T, Verizon and Sprint to end overages. You are invited to sign the petition and add your voice to the growing movement to rid the wireless industry of domestic overages once and for all.