NYC lawsuit detailing T-Mobile’s abusive practices calls for additional investigations and underscores concerns over proposed merger with Sprint

This week, New York City sued T-Mobile USA for engaging in “rampant” sales abuses of customers of its prepaid brand Metro by T-Mobile across the city. As Reuters reports:

In a complaint filed in the state supreme court in Manhattan, the city said it had identified more than 2,200 violations by T-Mobile, whose ‘pervasive’ illegal activity spanned 56 Metro stores in all five boroughs, including authorized dealers and stores run by its MetroPCS NY unit.

… In its complaint, New York City said it had evidence that many Metro stores sold used or reconditioned phones as new, and charged taxes that were excessive or appeared to be ‘made up,’ including ‘device change taxes’ and ‘device activation taxes.’ It also accused T-Mobile of partnering with third parties to enroll unsuspecting consumers in expensive financing plans without their consent.

“The abusive and predatory practices alleged in the new lawsuit are a disturbing indictment of T-Mobile’s management and reinforce CWA’s continued concerns about the impact of the proposed T-Mobile-Sprint merger, especially on workers and low-income consumers,” said Debbie Goldman, Research and Telecommunications Policy Director for CWA. “The practices detailed in the lawsuit are not the result of individual actions by rogue workers, but of a systemic problem at T-Mobile: a company-wide high pressure sales culture that harms workers and consumers alike. If these abuses are happening in New York City, there is a high likelihood they are happening around the country. Other states and jurisdictions should open their own investigations.”

The details of the lawsuit also underscore concerns over the proposed T-Mobile-Sprint merger. The same low-income consumers who rely on prepaid services and who T-Mobile took advantage of through these abusive practices would be disproportionately harmed by the proposed merger. T-Mobile and Sprint have aggressively prevented their employees from exercising their legal right to join a union. A union contract can help protect workers who expose abuses like the ones alleged in this lawsuit. Additionally, the persistent pattern of deception detailed in the new lawsuit raises additional questions about how we can trust the company’s promises to the Department of Justice and Federal Communications Commission about the merger.

There have been long standing concerns over T-Mobile’s sales practices and the related harms. For example, Change to Win Retail Initiatives published a report titled, “Under Pressure” in December 2016 that highlighted how T-Mobile’s “unethical” sales practices hurt both customers and employees.

Links:

New York City sues T-Mobile over 'rampant' customer sales abuses (Reuters, Sep. 4, 2019)

Change to Win Retail Initiatives Report: “Under Pressure” (Change to Win, 2016)