T-Mobile accused of ‘illegally’ charging customers a hidden fee

In the third quarter of 2024, T-Mobile earned a net income of $3.1 billion, a whopping 43 percent increase compared to the same quarter last year.

It also managed to add a record 1.6 million new postpaid customers during the third quarter, the highest amount it added during any third quarter in a decade.

As T-Mobile faces record business growth, it is being accused of deceiving its customers to boost its profits.

T-Mobile allegedly ‘duped’ customers into paying hidden fee

A recent class-action lawsuit filed by T-Mobile customers alleges that T-Mobile has been “illegally” charging its customers a hidden fee called the “Regulatory Programs and Telco Recovery Fee” (RPTR) for two decades.

T-Mobile customers are currently charged $3.49 a month per line for this fee, and it has allegedly increased by 28 percent over the last eight years.

“To conceal these illegal fees, T-Mobile includes the RPTR Fee in the section of their customer’s monthly bill that bundles this fee with ‘Government Taxes and Fees’ to disguise it as a required government charge, passthrough fee, or other regulatory-mandated fee,” reads the lawsuit. “In reality, the RPTR Fee is a concoction designed to increase T-Mobile’s revenue and pad its bottom line.”

According to T-Mobile’s website, the Regulatory Programs component of the fee helps the company “defray costs for funding and complying with government mandates, programs and obligations.”

The Telco Recovery part of the fee helps T-Mobile pay for “costs and charges” imposed by other carriers for the delivery of calls, and for network facilities, operations and services.

The customers in the lawsuit claim that the description of the fee is an “unfair and deceptive explanation” since the fee “isn’t strapped to any benchmark” and can change “at will.”

They also allege that this fee is not mentioned in their T-Mobile Subscriber Agreement as it omits “how much is charged, when it is charged, and that it is charged per line.”

“Customers can find out what fees they are being charged only by looking at their bill after they’ve signed up for an account,” reads the lawsuit. “T-Mobile should have accurately stated the true monthly prices for its post-paid wireless plans in its price representations and advertising.”

The customers in the lawsuit allege that the way T-Mobile enforced this fee on customers violates the Communications Act. They are seeking an unknown amount in damages.

T-Mobile customers previously raised red flags around the fee

It is no surprise that T-Mobile is facing a lawsuit over its Regulatory Programs and Telco Recovery Fee since frustration over the fee has been brewing in recent years.

In a discussion thread on T-Mobile’s website, some customers have called out the legitimacy of the fee.

“T-Mobile has gone too far with its Comcast like Fees called the $3.49 per line Reg Program & Telco Fee! We all must demand a complete explanation for this exorbitant so-called Fee Tmobile is adding to our monthly phone bill!” wrote one T-Mobile user.

“Please, every Tmobile user complain about this large made-up Fee and ask for its removal immediately!” said another customer.

“Deceptive advertising. Offering a plan at a set rate and then when you get a bill they have added charges that they never mentioned when you signed up. A bunch of crooks!” wrote another.

Verizon sued for charging a similar fee

The lawsuit against T-Mobile comes after Verizon settled a class-action lawsuit earlier this year for charging its customers a similar fee called the “Administrative and Telco Recovery Charge.”

Customers who joined the lawsuit claimed that the fee was “misleading” and wasn’t disclosed in the monthly prices of their wireless plans. They also alleged that there were discrepancies on what the charge was actually for.

“Verizon explicitly and falsely stated on its monthly bills that the Administrative Charge is a surcharge imposed on subscribers to ‘cover the costs that are billed to us by federal, state or local governments,’” reads the lawsuit. “Thus, Verizon’s monthly bills have served to further Verizon’s deceptive scheme and keep customers from realizing they are being overcharged.”

Verizon ended up settling the lawsuit for $100 million, which will be divided up and paid to each customer who joined the lawsuit.