Newsletters
News & Information for Technology Purchasers NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
This ad will display for the next 20 seconds. Click for more information, or
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
Microsoft/Windows
Gartner's #1 for endpoint backup
Average Rating:
Rate this article:  
Court Rules T-Mobile's 'No Contract' Claim Deceptive

Court Rules T-Mobile's 'No Contract' Claim Deceptive
By Jennifer LeClaire

Share
Share on Facebook Share on Twitter Share on Linkedin Share on Google Plus

After an investigation of T-Mobile's practices, the Washington State Attorney General's Office decided T-Mobile failed to adequately disclose that customers who purchase a phone using the 24-month payment plan must carry a wireless service agreement with T-Mobile for the entire 24 months -- or pay the full balance owed on the phone if they cancel earlier.
 


T-Mobile has put a lot of energy behind its "uncarrier" marketing campaign that offers no contract and unlimited calling, data and text. But Washington State Attorney General Bob Ferguson didn't like what he heard.

In fact, Ferguson characterized it as deceptive advertising, promising consumers no annual contracts while carrying hidden charges for terminating early. He got a court order against the wireless carrier forcing it to clearly communicate the limitations of the new "no-contract" wireless service plans.

"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."

The Fine Print

T-Mobile recently launched a new type of wireless service plan, claiming to offer "no restrictions," "no annual contract" and no requirement that the consumer "serve a two-year sentence." However, the new plan does not include a phone. Instead, the company provides the option for consumers to purchase a phone at a monthly rate over a two-year term. T-Mobile also offers the opportunity to bring your own phone or pay the entire cost of the phone up front.

After an investigation of the company's practices, Ferguson's office decided T-Mobile failed to adequately disclose that customers who purchase a phone using the 24-month payment plan must carry a wireless service agreement with T-Mobile for the entire 24 months -- or pay the full balance owed on the phone if they cancel earlier.

Consumers who cancel their wireless service face an unanticipated balloon payment for the phone equipment -- in some cases higher than termination fees for other wireless carriers depending on how early they cancel.

T-Mobile has to pay attorneys' fees and costs to the Attorney General's Office in the amount of $26,046.40, and customers who purchased T-Mobile service and equipment between March 26 and April 25 can return their phones for a full refund and cancel their service plans without being required to pay the remaining balance owed on their devices.

Play by the Rules

We asked Jeff Kagan, a telecom industry analyst in Atlanta, about the court order. "It looks like spunky T-Mobile got caught with their britches down," he told us. "I like the fiery new CEO John Legere and his over-the-top behavior. It gets lots of media attention and good attention is just what T-Mobile needs. They have needed it for quite a while. However, T-Mobile must not cross over the line, and according to the Washington attorney general, that's what they did. And I fear that will hurt them."

As Kagan sees it, the issue with the attorney general doesn't look good. Indeed, he noted, companies can spend years building trust and a strong relationship with customers and lose it all in the snap of two fingers. While he hopes T-Mobile is successful in building a stronger company via the MetroPCS merger, he encourages the wireless carrier to play by the rules.

"There is plenty of room to grow if you do business the right way," Kagan said. "Just look at companies like AT&T Mobility and Verizon Wireless as two strong examples."
 

Tell Us What You Think
Comment:

Name:

Jacquie:

Posted: 2013-04-27 @ 9:39am PT
I think all the carriers rip you off, in one way or another. Cricket is good, but their phones are cheaply made.



IT departments are embracing cloud backup, but there's a lot you need to know before choosing a service provider. Learn all the critical things you need to know by accessing the white paper, "5 Things You Didn't Know About Cloud Backup". Access the White Paper now.


 Microsoft/Windows
1.   Windows 9 Preview Date: Sept. 30?
2.   Price Wars Hitting Laptop Market?
3.   Office 365 Tailored for Attorneys
4.   Plan Your Move from Windows 7 Now
5.   Microsoft Patch Tuesday Stars IE


advertisement
China Puts Microsoft Under the Lens
Official anti-monopoly probe launched.
Average Rating:
Plan Your Move from Windows 7 Now
But don't rush to deploy Windows 8.
Average Rating:
Dynamics CRM Online Extends Reach
Now available in 17 more countries.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
UPS Stores in 24 States Hit by Data Breach
Big Brown has been breached. UPS said that about 105,000 customer transactions at 51 of its UPS Store locations in 24 states could have been compromised between January and August.
 
Cost of Target Data Breach: $148 Million Plus Loss of Trust
The now infamous Target data breach is still costing the company -- and its shareholders -- plenty. In fact, the retailing giant forecast the December 2013 incident cost shareholders $148 million.
 
Aruba Networks Handles Black Hat with Aplomb
It's not an easy job. Aruba Networks' task throughout the Black Hat USA conference in Las Vegas this month was to ensure thousands of attendees could connect without malicious attacks.
 

Enterprise Hardware Spotlight
Acer's New Desktop Box Rides the Chrome OS Wave
Filling out its Chrome OS line, Acer is following the introduction of a larger Chromebook line earlier this month with a new tiny $180 desktop Chromebox and also a smaller Chromebook.
 
Three New Lenovo PCs Aimed at Business Users
Businesses everywhere want computing solutions that do more for less money, and Lenovo has unveiled three new desktop PCs that offer solid computing at a budget-minded price.
 
Aruba Networks Handles Black Hat with Aplomb
It's not an easy job. Aruba Networks' task throughout the Black Hat USA conference in Las Vegas this month was to ensure thousands of attendees could connect without malicious attacks.
 

Mobile Technology Spotlight
Google Glass Adds Voice Access to Phone Contacts
The latest update to Google Glass will let users access their top 20 phone contacts with voice commands alone. A user can then choose a phone call, Google hangouts, e-mail or text messaging.
 
Samsung, B&N Target Amazon with Nook Tablet
They've seen the enemy and it is Amazon. So Samsung and Barnes & Noble are teaming up to combat their common foe with a 7-inch tablet that blends Samsung’s tech, Nook’s content and e-reader platform.
 
Acer's New Desktop Box Rides the Chrome OS Wave
Filling out its Chrome OS line, Acer is following the introduction of a larger Chromebook line earlier this month with a new tiny $180 desktop Chromebox and also a smaller Chromebook.
 

Navigation
NewsFactor Network
Home/Top News | Enterprise I.T. | Cloud Computing | Applications | Hardware | Mobile Tech | Big Data | Communications
World Wide Web | Network Security | Data Storage | CRM Systems | Microsoft/Windows | Apple/Mac | Linux/Open Source | Personal Tech
Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.