The fine print in T-Mobile’s alleged overbilling scam

The FTC alleges that T-Mobile used third-party billing to collect hundreds of millions of dollars from customers by hiding unauthorized charges in their phone bills about premium texting subscriptions that cost $9.99

T-Mobile USA CEO John Legere was quick to skirt responsibility this week after the Federal Trade Commission (FTC) filed a complaint that said the mobile carrier bilked hundreds of millions of dollars from customers by hiding unauthorized charges in their phone bills.

“…We put in place procedures to protect our customers from unauthorized charges,” Legere said in an online statement Tuesday. “Unfortunately, not all these third party providers acted responsibly—an issue the entire industry faced.”

The complaint, which seeks to recoup millions of dollars for consumers, centers around third-party providers and the clandestine practice of “cramming.”

According to the FTC:

In a process known as ‘third-party billing,’ a phone company places charges on a consumer’s bill for services offered by another company, often receiving a substantial percentage of the amount charged. When the charges are placed on the bill without the consumer’s authorization, it is known as “cramming.

The FTC alleges that T-Mobile used third-party billing to collect up to 40 percent of the total amount charged to customers. The fees were for purported premium texting subscriptions for content such as “flirting tips, horoscope information or celebrity gossip that typically cost $9.99,” according to the complaint.

Often the third-party charges were “bogus,” the complaint further alleges, and never authorized by the customer. And once they came through, the charges appeared buried and ambiguous on a customer’s bill, according to the complaint (See FTC graphic below).

Furthermore, the FTC alleges that in some cases T-Mobile continued to bill its customers “years after becoming aware of signs that the charges were fraudulent.”

“It’s wrong for a company like T-Mobile to profit from scams against its customers when there were clear warning signs the charges it was imposing were fraudulent,” FTC Chairwoman Edith Ramirez said in a statement. “The FTC’s goal is to ensure that T-Mobile repays all its customers for these crammed charges.”

Look to the fine print

In his statement, Legere said that it is T-Mobile’s position that “customers should only pay for what they want and what they sign up for.” Well, it appears what customers sign up for with T-Mobile is the possibility of being scammed or “crammed” by a third-party provider.

From the company’s terms and conditions (Effective March 27, 2014):

Your Device can be used to purchase services and products from third-party providers and Charges for these purchases may be included on your T-Mobile bill. …We use filters to block spam messages, but we do not guarantee that you will not receive spam or other unsolicited messages, and we are not liable for such messages.

And once it appears on the bill (Again, under terms and conditions):

Billing. You agree to pay all charges we bill you or that were accepted or processed through your Device.

Got that? Accepted OR processed. So let’s review: It appears there’s no guarantee you won’t have to pay for unsolicited third-party charges if the charges are “processed” through your phone. Hmm.

Protect yourself

One thing you can do to protect yourself is opt out of third-party purchases. T-Mobile offers the exemption but you have to do it yourself by visiting or calling Customer Care.

For more tips on protecting yourself from cramming and other types of cell phone fraud click here.



What will be special in Railway Budget?

 Speedy trains from main city stations to sights in various historical places would be a boon to tourists and would become very popular

Railway Minister, DV Sadananda Gowda will present his first budget on Tuesday and is widely expected to offer proposals that will ensure users get value for their money!

It may be recalled that he had stated earlier that passengers would be happy to pay more provided there was improvement in services and facilities to make travel a pleasure and not a pain.

There have been broad hints that, after all FDI (Foreign Direct Investments) in Railways would be allowed as this will enable all round improvement; introduce proposals for speed trains; extend tracks to enable great coverage; provide better handling facilities for both domestic and export freight by ensuring priority in movements. A tall order, but doable!

For example, the latest addition to the speedy movement covers the Delhi-Agra trip that was actually achieved in about 90 minutes. This, no doubt, will enable tourists, both domestic and foreign, to enjoy the ride, do the sight seeing in Agra/Delhi and return to base quickly.

Such speedy trains from main city stations to sights in various historical places would be a boon to tourists and would become very popular.

In fact, in the years ahead, Railways ought to be able to provide rail services directly from city centres to the airports. Decades ago, for instance, one could get off at the London Heathrow and take the tube to the city! Similar service linking the metro, mono rail, circular railways etc are available in many cities in the world. Why should India lag behind?

There is one other area that can be thought of and implemented. At the moment, there are no facilities available for Railway Travel Insurance. No doubt, in the case of accidents leading to unfortunate death and/or injury, ad hoc compensation not only the Railway administration but by State governments also.

So, why not work out a scheme that would enable every passenger to take a rail travel insurance at an additional (nominal) charge on the ticket, which may be made optional, and quantum of compensation is pre-determined and publicised?

Finally, while welcoming the FDI to bring in overall improvement in the Railway operations, government ought to seriously consider making it a Corporate body. Additionally, this opportunity to own and operate the railways, even if necessary sector wise, should be offered to Indian corporate giants. In such an event, they would become responsible for laying additional tracks, and/or lay double lines, work out the prospects for greater utilization of tracks, run dedicated freight corridors and offer super-service like a full-service airline on tracks?

Privatisation of Railways would also bring in much needed funds to the government for their enormous infrastructure projects on hand. All these will create tremendous opportunity for expanding the employment potential too.

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)


Sensex, Nifty may give up some gains – Monday closing report

A close below the day’s low continues to be the initial indicator for reversal

The Indian stock market on Monday witnessed a volatile session but managed to keep itself above last week’s low and closed in the positive after recording almost the same gain as made on Friday. Ahead of the budget day, the market seems to be very optimistic about the government’s growth-oriented budget.

The S&P BSE Sensex opened at 26,040 while CNX Nifty opened at 7,780. Sensex moved in the range of 25,993 and 26,124 and closed at 26,100 (up 138 points or 0.53%) while Nifty moved between 7,755 and 7,792 and closed at 7,787 (up 36 points or 0.46%). The NSE recorded a volume of 98.54 crore shares. India VIX rose 6.90% to closed at 19.4075.

Among the other indices on the NSE, IT (2.63%), Infra (1.02%), Pharma (0.99%) and Auto (0.68%) were gainers while the top five losers were Bank Nifty (1.21%), PSU Bank (0.87%), Finance (0.38%), Media (0.35%) and Smallcap (0.22%).

Of the 50 stocks on the Nifty, 30 ended in the green. The top five gainers were IDFC (6.01%), Sun Pharma (4.25%), Tata Power (3.45%), TCS (3.30%) and Infosys (2.98%) while the top five losers were IndusInd Bank (2.19%), HDFC Bank (1.98%), UltraTech Cement (1.88%), BPCL (1.73%) and ONGC (1.54%).

Of the 1,594 companies on the NSE, 787 companies closed in the green, 758 companies in the red while 49 companies closed flat.

Railway Minister Sadananda Gowda will present the final Railway Budget for 2014-15 in Lok Sabha on Tuesday. All the software stocks included in the Sensex 30 pack were among the top six gainers namely Infosys (3.23%), TCS (3.06%) and Wipro (1.86%).

Ministry of Petroleum and Natural gas clarified after market hours on Friday that it is not proposing any increase in prices of subsidised LPG and kerosene prices after certain media reports speculated about the possibility of increase in the prices of subsidised LPG and PDS Kerosene. Upstream oil and gas producers pay part of their profits to the government to finance subsidies to oil marketing companies, which sell Kerosene and LPG to the public at below market prices. Raising of LPG and kerosene prices would enable them to retain larger profits. ONGC (1.60%) was among the top two losers in the Sensex 30 stock.

Morgan Stanley upgraded IDFC to "overweight" from "underweight" and raised its target price. Basis of upgrading given was the potential benefits after RBI Governor Raghuram Rajan hinted at the possibility of exempting banks from liquidity ratio norms when raising debt for infrastructure. IDFC (6.23%) was the top gainer in the ‘A’ group on the BSE.

In response to a news that HDIL will sell its commercial complex in Mumbai suburb to cut debt, HDIL has clarified today that no transaction or agreements have been entered into which needs to be disclosed to Stock Exchanges pursuant to Clause 36 of the Listing Agreement. HDIL (3.78%) was the top loser in the ‘A’ group on the BSE.

US markets remained close on Friday on account of Independence Day holiday.

Asian indices showed a mixed performance. Jakarta Composite (1.70%) was the top gainer while Nikkei 225 (0.37%) was the top loser.

Business activity in emerging markets expanded last month at its fastest rate since March 2013, boosted by strong growth in China and India, a survey showed on Monday.
HSBC's composite emerging markets index of manufacturing and services purchasing managers' surveys jumped to 52.3 in June - well above the 50 threshold that indicates expansion - from 50.6 in May.

European indices were trading lower. US Futures were trading marginally in the red.


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