Washington State Office of the Attorney General Bob Ferguson – April 25, 2013 T-MOBILE’S WIRELESS PLAN:
- The Washington State Attorney General (the “Washington AG”) and T-Mobile USA, Inc. (“T-Mobile”) entered into a court-ordered agreement requiring the company to modify its allegedly deceptive advertisements for new wireless service plans.
- T-Mobile’s latest plan offered “no restrictions,” “no annual contract,” and no obligation on behalf of the consumer to “serve a two year sentence.”
- The AG’s office claimed that despite these claims, T-Mobile failed to communicate that there would be charges if a consumer decided to terminate his/her phone plan early.
- T-Mobile’s new wireless plan does not include a phone. But consumers may purchase a phone by paying a monthly fee over a two-year period, or they may use their own phone, or pay the entire fee up front.
- According to the Washington AG’s office, the company failed to disclose that customers who purchased a phone using the 24-month payment plan were required to stay with T-Mobile for the entire 24 months or face paying the full balance still owed on the phone for cancelling earlier.
- Essentially, consumers would be required to pay an unexpected “balloon payment” for the phone equipment, which the Washington AG says could be higher than termination fees charged by other wireless carriers.
- T-Mobile has cooperated with the Attorney General’s Office by signing an Assurance of Discontinuance (“AOD”), promising not to misrepresent consumers’ obligations under its contracts.
- Under the terms of the agreement, T-Mobile is obligated to pay the Washington AG’s attorneys’ fees and costs, in the amount of $26,046.40.
- The company must also disclose that customers who terminate their T-Mobile wireless service plans before they finish paying for the phone will have to pay the balance at the time of cancellation.
Pursuant to the terms of the AOD, T-Mobile has also agreed that it will:
- Not misrepresent customers’ true obligations under the terms of its contracts for the sale of service or equipment;
- Make clear the consequences associated with cancelling T-Mobile service plans, including restrictions or limitations on cancellation;
- More clearly state in all advertisements the true cost of telephone equipment, including the requirement that the customer carry a wireless service agreement for the life of the 24-month financing plan;
- Instruct representatives to fully disclose obligations under the terms of its contracts, including developing a “Frequently Asked Questions” page; and
- Train customer service representatives to comply with the terms of the settlement.
- The Washington AG felt that a “critical component” of the new T-Mobile wireless service plan was omitted from its advertisements.
- Consumers who purchased T-Mobile service and equipment between March 26 and April 25, 2013, are entitled to a full refund and may cancel their service plans without having to pay any outstanding balance for the phone, as long as certain terms of the service agreement are otherwise satisfied.