T-Mobile slammed over ad claims
Washington state's attorney general says the company's boasts of doing away with annual contracts were deceptive.
T-Mobile, which positioned itself last month as having dropped annual contracts, was slammed Thursday by Washington state Attorney General Bob Ferguson, who said the company's ads were deceptive. He also announced he had reached a settlement with the company that would allow anyone duped by the ads to cancel their arrangements with the company.
Seeking to capitalize on one consumers' big annoyances -- the two-year cell mobile phone contract tied to the acquisition of a discounted phone -- T-Mobile launched an ad blitz focused on claiming they had removed the obligation. But Ferguson asserted the ads omitted key details including that customers who quit the carrier after less than 24 months could be forced to make a big payment.
The office reached an agreement with T-Mobile to cease the allegedly deceptive advertising and allow anyone who who signed up between March 26 and Thursday to cancel their contracts without penalty. Users would have to return any new equipment they received while signing up. Ferguson's office said the settlement applies to customers nationwide.
"As Attorney General, my job is to defend consumers, ensure truth in advertising, and make sure all businesses are playing by the rules," Ferguson said. "My office identified that T-Mobile was failing to adequately disclose a critical component of their new plan to consumers, and we acted quickly to stop this practice and protect consumers across the country from harm."
T-Mobile issued this statement today: "... our goal is to increase transparency with our customers, unleashing them from restrictive long-term service contracts -– this kind of simple, straight forward approach is core to the new company we are building. While we believe our advertising was truthful and appropriate, we voluntarily agreed to this arrangement with the Washington AG in this spirit. "
T-Mobile's deal of having a month-to-month arrangement rather than a contract applies to anyone who brings their own phone or pays for a new one upfront. Anyone who received a discounted new phone while signing up for service would be subject making a balloon payment if they quit the service, the attorney general's office said, because they essentially agreed to finance the cost of the phone over a two-year period.
Ferguson's office reached the voluntary agreement, known as an Assurance of Discontinuance, that was filed in King County Superior Court. In it, T-Mobile agreed to not misrepresent that consumers have no obligations under the contracts and to disclose that anyone who received a phone when signing up would owe the remaining value if they cancel after less than two years of service.
T-Mobile also agreed to pay the Attorney General’s Office $26,046 to cover the costs of the case.
More from MSN Money:
This is Total BS. It is my understanding that Washington State Attorney General Bob Ferguson received zero complaints from T-Mobile customers. I am not sure how T-Mobile was being misleading. There is no contract on service. If you want to buy a phone with their 0% financing, you are obligated to pay the whole amount. I am not sure where the disconnect is here. Maybe somewhere between Bob Ferguson's ears.
If you want to leave TMobile and go with another provider that's fine. Give them a credit card number and pay for the damn phone. That's what you agreed to do. Do you expect them to finance phones at zero percent so you can use them with another provider ? Apparently the AG thinks the answer is yes.
If you can't afford a 600 dollar smartphone, then don't buy one. Get a Tracfone for 10 bucks and quit your bitching.
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
ABOUT SMART SPENDING
LATEST BLOG POSTS
Which store penalizes you for too many returns? And which one will let you retroactively apply coupons?