In 2013, T-Mobile, which brands itself as the “Uncarrier,” ended its two-year service contracts for phone service — a move that was heralded by many. However, closer scrutiny has resulted in a degree of dismay. While it seemed that T-Mobile was setting itself up to sell its mobile phone services with fewer strings attached, such may not be the case.
T-Mobile has come under fire for misleading consumers in its advertising campaigns because its “no-contract” services usually come with equipment installment sales contracts. While these contracts may cast an impression of mobility between carriers, consumers rarely realize that the T-Mobile system is different than other systems in use across the country and, more often than not, a cell phone purchased from T-Mobile may not be used in other systems. So, instead, the consumer remains embroiled in the middle of a two-year commitment.
The Consumer Financial Protection Bureau (CFPB) has been asked to investigate these issues and determine whether or not there should be liability. To add to the intrigue, the CFPB was petitioned by a consortium of four major unions that may or may not have ties with the Communications Workers of America, which is trying to organize T-Mobile’s labor force.
The takeaway from this is that less than transparent communications with the consumer may lead a business into hot water, particularly when that business has adversarial relationships. It’s always wise to avoid being deceitful.