Thursday, December 25, 2014

POSTED: Friday, December 19, 2014, 1:34 PM
A T-Mobile store sign is seen in Broomfield, Colorado. (Rick Wilking / Reuters)

Just yesterday, it seems, I was giving T-Mobile credit for targeting another wireless industry "gotcha" - tricky sales methods for online data that it says cost consumer billions of dollars a year.  Today, T-Mobile is taking the Business Walk of Shame: settling charges that it profited by allowing tricky third-party billers to bilk its unsuspecting customers by "cramming" pointless charges onto their phone bills.  The Federal Communications Commission says the fourth-place "Un-Carrier" has agreed to pay $90 miillion to put the embarrassing allegations behind it.

This is a long story, and nearly every carrier - landline as well as wireless - seems to have gotten into the game. Just this Wednesday, the Consumer Financial Protection Bureau sued third-place Sprint over cramming, accusing it of profiting from "tens of millions of dollars" in unauthorized third-party charges on its bills, and ignoring red flags that should have made the trickery clear. In October, AT&T agreed to pay $105 million to settle cramming charges.

It was actually a third Washington agency that brought T-Mobile's cramming to light. The Federal Trade Commission sued the carrier this summer, accusing it of collecting hundreds of millions of dollars from its customers for services such as flirting tips, horoscopes, and antivirus scans - items that typically cost T-Mobile subscribers $9.99 a month, which is about the limit for companies' trying to sneak these maybe-no-one-will-notice charges onto your bills. Worst of all: Even prepaid customers, who never received any bills showing them, were dinged.

POSTED: Tuesday, December 16, 2014, 1:02 PM

I'll have more to say about this later on, but the news that T-Mobile touted today as "huge" and  "so big we had to keep it a surprise" is at least modestly significant - and, once again, a disruption aimed at challenging Verizon and AT&T: The "Un-carrier" says it will offer new and existing subscribers a "Data Stash," allowing them to roll-over their unused gigabytes at the end of each month.

Sometime in January, each customer who qualifies will get a "gift" of 10 gigs to start with. Once those are used up, customers will get to stash unused data each month, and keep it for up to a year.

T-Mobile already doesn't charge for data overruns. If you're a customer and run through, say, your 1-gigabyte or 3-gigabyte allotment, you simply get throttled to 2G speeds. But T-Mobile CEO John Legere says his competitors collect about $1.5 billion a year for data overages - pure margin, he says. And more to the point, he says, the threat of those charges prompts many people to pay for far more data than they actually need - he estimates about 3 extra gigs a month per subscriber.

POSTED: Tuesday, November 18, 2014, 7:12 PM
Federal regulators are extending the recall of potentially defective Takata airbags to the whole country, not just the hot and humid regions that were the focus of the original recalls of nearly 8 million vehicles.

The National Highway Traffic Safety Administration announced the widened recall late Tuesday afternoon, saying it had found evidence that "a recent driver’s side air bag failure in a vehicle outside the current regional recall area" was similar to five previous driver’s-side airbag ruptures in vehicles covered by the initial recalls, which targeted vehicles from 10 manufacturers.

Takata had limited the scope of the initial recalls to roughly 1 in 3 of the similarly designed airbags by insisting that the horrific incidents linked to the devices - in which shards from their inflators pierce victims like shrapnel from military explosives - were occurring only in regions where the inflators were subject to consistently hot, humid weather. Outside experts such as Clarence Ditlow of the Center for Auto Safety said incidents reported outside such areas suggested Takata and the automakers were underplaying the risk.

POSTED: Tuesday, October 28, 2014, 5:02 PM
In this Oct. 21, 2014, photo, people pass an AT&T store in New York's Times Square. AT&T is being sued by the government over allegations it misled millions of smartphone customers who were promised unlimited data but had their Internet speeds cut by the company slowing their ability to open web pages or watch streaming video. (AP Photo/Richard Drew)

The Federal Trade Commission has looked at the evidence and, apparently, the dictionary and decided to hold AT&T Mobility to the standard that it should mean what it says when it promises "unlimited data." Imagine that.

In a lawsuit announced this afternoon, the FTC says the second-largest wireless carrier has throttled at least 3.5 million people since it quit offering new "unlimited data" plans - sometimes after they used as little as 2 gigabytes per month, 50 percent less than the carrier claimed in 2012 when it acknowledged cutting some customers' data speeds by an order of magnitude or more. When AT&T quit offering the plans, it allowed renewing customers to keep them - ostensibly under the original terms.

“The issue here is simple: ‘unlimited’ means unlimited,” FTC Chairwoman Edith Ramirez said in announcing the lawsuit.  According to the agency's announcement:

POSTED: Friday, October 24, 2014, 11:21 AM
((Stock Photo))

If you've gotten one of those highly suspicious phone calls claiming to be alerting you to problems with your Windows computer, this will be heartening news: The Federal Trade Commission says it has finally shut down the fraudsters, who the FTC says ran the scam from Albany, N.Y., but operated a call center in Kolkata, India.

The consumers I've heard from were all too wary to fall for the scam, but the calls - allegedly from Microsoft or Facebook - left some of them wondering. Those who fell for it were talked "into paying for bogus warranty programs and software that was freely available," the FTC said. Most paid $149 to $249, though some were charged as much as $600.

The FTC said the scammers had made nearly $2.5 million since early 2012. It said the defendants - Pairsys Inc. and two individuals, Uttam Saha and Tiya Bhattacharya - had agreed to terms in a preliminary injunction barring them from misrepresenting themselves or bogusly claiming that  consumers' computers are infected with viruses or spyware. The terms also bar them from selling or renting their customer lists - a way that scammers sometimes profit even after their original deceit has ended. Here's what the FTC  announced:

POSTED: Tuesday, July 1, 2014, 2:54 PM
A T-Mobile store sign is seen in Broomfield, Colorado. (Rick Wilking / Reuters)

T-Mobile has made big strides portraying itself as the nation's most consumer-friendly wireless carrier, thanks to initiatives such as eliminating gotcha! data-roaming charges that can add hundreds or thousands of dollars to travelers' bills. Now it has a ton of egg on its face from a much less consumer-friendly practice: The FTC says that from 2009 to November 2013, it allowed third parties to sneak hundreds of millions of dollars' worth of small monthly charges onto customers' bills - a practice known as "cramming."

It a complaint just announced, the Federal Trade Commission says it has filed a complaint accusing the number-four carrier of "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."

The FTC's email announcement continued:



POSTED: Wednesday, June 25, 2014, 11:07 AM
car, rental, rental car, car rental
(istock photo)

One of the worst things about renting a car, especially for infrequent travelers, is that moment at the car-rental counter - or next to the car, if you're renting from Enterprise - when the rental agent tries to sell you on purchasing a "collision damage waiver": optional coverage that spares you from having to pay your own insurance policy's deductible in case of an accident.

If you own an insured car yourself and rent with a major credit card - some MasterCards excepted - you should know you probably don't need it. But if you haven't checked beforehand, you might be uncertain enough to spend needlessly, and some rental agents might seem eager to stir that anxiety. An Enterprise agent, while renting me a minivan because the smaller car I'd booked wasn't available, once warned that "vans aren't covered under most credit-card policies."  I had to call my card issuer to check. It turned out that the exemption applied only to big vans, which aren't considered passenger-car rentals.

The best way to be sure what's covered is to read your card's contract terms carefully and ask about anything you find confusing. But second-best may be this new study by CardHub.com, which reports that 20 percent of renters always buy the waiver, and that another 20 percent sometimes do, even though every Visa, American Express and Discover card includes rental-car protection. Some other highlights of its findings:

  • All four major card networks provide some form of rental car insurance coverage, though MasterCard does not provide coverage on all of its cards.
  • American Express received CardHub's highest score (90%) for its rental policy. Discover ranked second (88%), MasterCard third (79%), and Visa last (74%)
  • All four require cardholders to charge their entire rental car purchase on their credit card and decline supplemental insurance/Collision Damage Waivers (CDW) offered by the rental company in order to be eligible.
  • All four exempt coverage for rental of exotic, expensive, or antique cars; trucks; vehicles with open beds; and off-road vehicles
  • Visa is the only network that does not cover accidents occurring on dirt and gravel roads. However, MasterCard only covers them if those roads are “regularly maintained.”
  • All card networks exclude rentals that exceed certain time limits. Coverage may not extend to every country overseas - checking beforehand is key.
  • Minivans may not be a problem, but some SUVs are. CardHub says American Express excludes coverage for some popular models, including Chevy Suburban and Tahoe, GMC Yukon, Ford Expedition, Lincoln Navigator, Toyota Land Cruiser, Lexus LX450, Range Rover, and full-sized Ford Broncos.
POSTED: Thursday, June 19, 2014, 2:58 PM
T-Mobile CEO John Legere holds an Apple iPhone 5S as he speaks at T-Mobile's Uncarrier 5.0 event, Wednesday, June 18, 2014, in Seattle. T-Mobile announced a program that will offer free seven-day "test drives" of the Apple iPhone on the T-Mobile network. (AP Photo/Ted S. Warren)

T-Mobile CEO John Legere has been waging war since last year on what he calls the "arrogant U.S. wireless industry," and his big news yesterday in Seattle was a one-two punch. He's offering a free seven-day "test drive" of T-Mobile's network on a loaner iPhone 5S, allowing it to show off its LTE investments while Apple wows new customers. And he's offering unmetered streaming from half a dozen music services such as Pandora and Spotify, promising more to come as T-Mobile subscribers request them.

Unvarnished good news? That was my first reaction, perhaps because it's easy to be a fan of Legere's profane, take-no-prisoners style targeting an industry that often acts as if it has customers over a barrel. But when I asked yesterday about the net-neutrality implications of the music streaming, which treats some companies' data packets different than others, I got the phone and email equivalent of a blank stare - as did a reporter from the Verge, when he asked Legere about it Wednesday night in Seattle. Under a headline that says, "It sounds great, but it's really, really, really bad," the Verge reports:

It sounds wonderful — and right in line with the "uncarrier" image that firebrand CEO John Legere has worked so hard to cultivate — but it's a terribly slippery slope: T-Mobile has decided, arbitrarily, that some of the data traveling over its pipes should count against a cap, while other data should not. What's to stop it from using data cap exemptions as a punitive measure against content providers that aren't on good terms with T-Mobile (or its parent company Deutsche Telekom)?

About this blog

Jeff Gelles, who writes the Inquirer's weekly Consumer 14.0 and Tech Life columns, takes a broad look at the marketplace of goods, services, and ideas.

Reach Jeff at jgelles@phillynews.com.

Jeff Gelles Inquirer Business Columnist
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