T-Mobile's business practices: deceptive, abusive

A coalition of civil rights, consumer, and labor organizations are calling on the Consumer Financial Protection Bureau (CFPB) to investigate misleading advertisements and abusive debt collection practices at T-Mobile. A new report by Change to Win’s Retail Initiative finds that T-Mobile’s wireless service advertisements mislead customers and result in “unexpected obligations for the company’s subscribers—too often leaving consumers with hundreds or even thousands of dollars in unanticipated charges, at the mercy of aggressive debt collectors and with little recourse to dispute charges.” In addition to the CFPB investigation, New York Attorney General Eric Schneiderman is also looking into the practices.

T-Mobile’s advertising claims that it will pay customers’ early termination fee if they switch from a competing carrier and that they offer service plans with “no annual contract.” But that termination fee repayment often takes “significantly more than eight weeks” and the customer may be denied or may not be reimbursed for the total fee amount.

In addition, more than 90 percent of T-Mobile’s subscribers participate in the company’s two-year “equipment installment plan.” Termination of this plan results in any outstanding balance becoming due immediately, so for customers this plan is in practice -- if not in name -- a two-year contract with high termination fees.

In short: T-Mobile’s advertising is deceptive -- and deceptive in a way that costs customers. Atestimonial from Francois H, one of T-Mobile’s Brooklyn-based customers, details how the company’s misleading customers for, in this case, hundreds of dollars:

Half a year ago, I switched to T-Mobile because you promised to reimburse my cancellation fees and buy my iPhone 5S back. All these months later, you still owe me close to $500 between the $350 in cancellation fee and the price of the phone I sent you. I’m not asking for a favor, I’m simply asking T-Mobile to honor the contract we signed and reimburse the fees.

A broad coalition is sending a letter to the CFPB, outlining T-Mobile’s deceptive practices and asking for a formal investigation. USA Todayreports that New York Attorney General Eric Shneiderman is also investigating the complaints against T-Mobile’s advertising practices.

This isn’t the first time the “Un-carrier” has engaged in poor corporate behavior. In March, a judge at the National Labor Relations Board found T-Mobileguilty of nationwide labor law violations against its workers. As Speed Matters reported at the time: “At issue were illegal corporate nationwide policies that block workers from organizing or even talking to each other about problems at work. Workers throughout the T-Mobile US system were subjected to and effectively silenced by these illegal policies; the judge’s order to rescind them covers 40,000 workers.”

View Change to Win’s full reporthere.

Unmasking the Un-Carrier: Deception and Disparate Impact at T-Mobile (Change to Win, Dec. 2015)

 T-Mobile accused of false advertising; New York AG investigates (USA Today, Dec. 8, 2015)

T-Mobile Guilty of Illegal Corporate Policies Against US Workers (Speed Matters, Mar. 19, 2015)

 At Capitol Hill Briefing, T-Mobile Worker Highlight Culture of Fear (CWA, Dec. 3, 2015)