Washington state Attorney General Bob Ferguson has ordered T-Mobile to change the way it advertises it new “UnCarrier” wireless plans, claiming the “contract free” claims it makes in the ads are “deceptive.”
Alongside the launch of the iPhone 5 earlier this month, T-Mobile rolled out new rate plans, which are designed to separate device costs from service costs. To purchase a device like the iPhone 5, T-Mobile customers make a small downpayment and pay off the rest of the cost over a two-year period, while also paying for a separate service plan.
Ferguson says that T-Mobile has failed to make clear that while there is no annual service contract for T-Mobile subscribers, customers who do stop using T-Mobile as their carrier of choice must still pay off the reaming cost of the device.
“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 has now entered a court ordered agreement that requires the magenta carrier to explicitly disclose the details of its contract-free plans both in its advertising materials and via employee training.
Assurance of Discontinuance (AOD) filed in King County Superior Court this week, T-Mobile agrees not to:
- Misrepresent consumers’ obligations under its contracts, including those contracts that have not restrictions or limitations
- Fail to adequately disclose that customers who terminate their T-Mobile wireless service before their device is paid off will have to pay the balance due on the phone at the time of cancellation.
The agreement also requires the carrier to offer full refunds to customers who purchased service and equipment between March 26 and April 25, 2013. Any subscribers who bought phones during this time period can cancel their service plans and receive device refunds without the need to pay the remaining balance on the device.
