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Consumer Advocates Lodge Complaint Against T-Mobile

Dec 8, 2015, 9:30 AM by Eric M. Zeman

Several consumer protection advocates are asking the Consumer Financial Protection Bureau to investigate T-Mobile's business practices. In particular, the groups believe T-Mobile's "no-contract" advertising is deceptive, and its debt-collection policies are predatory. The groups say T-Mobile links month-to-month service with two-year equipment financing plans, which are, in effect, contracts that result in financial penalties if broken. Moreover, the groups say T-Mobile engages in an abusive pattern of debt-collection practices by providing customers with little or no warning before sending debt to collection agencies, and by providing inaccurate information to collection agencies. The groups also believe T-Mobile's arbitration clause exacerbates the issue by placing legal barriers in consumers' way when seeking redress. The groups include Change to Win, Color of Change, League of United Latin American Citizens (LULAC), U.S. Action, and Consumer Federation of California. "T-Mobile's unethical behavior is particularly troubling because the company's customer base is disproportionately made up of people of color, and Latino and African American consumers are more reliant on mobile for phone service and internet access," said Brent Wilkes, Executive Director of LULAC. T-Mobile CEO John Legere responded to the accusations via Twitter. In a since-deleted Tweet, Legere said, "We stand by our ads! We haven't been accused of false advertising by any regulatory body." The CFPB has not responded publicly to the groups' request.

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Comments

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This forum is closed.

netboy

Dec 8, 2015, 4:26 PM

it' for dumb people

it called no contract, but if you leave early, you must pay the reminding balance for the phone. isnt this the same as 2 years contract, if you leave early, you pay ETF ?

Papeng27

Dude what you are paying only is the phone itself when you cancel the account. Actually, with the EIP(Equipment Installment Plan), it gives you the option to pay the phone in installments, say the phone price is $500 / 24 months = $20.83 monthly insta...
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The Victor

Dec 8, 2015, 11:21 AM

" T-Mobile links month-to-month service with two-year equipment financing plans, which are, in effec

what carrier doesnt do this?

Zpike

>>what carrier doesnt do this?

None of them.

What carrier did it first?

T-Mobile.

What carrier claims this isn't a service contract?

T-Mobile.

...

MadFatMan

Dec 9, 2015, 2:03 PM

Too Bad Ignorance Isn't Painful

Most carriers in most cases pay the manufacturer full MSRP for these wonderful devices that we enjoy. Despite the overwhelming notion that the "actual" cost is only $100 or so and the rest is an "inflated" markup. These devices are very expensive and most carriers device subsidy program (deeply discounted device in exchange for a term commitment of service) nearly bankrupt some carriers.

I don't have T Mobile, but what they did made sense.

Paraphrased - "We will charge you a reasonable rate for service (not padded to offset your device subsidy).

No contract and you can either bring your own device that you already own, buy of ours outright, or buy a new device and we will bill you for the device autonomous of your service plan. -
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Zpike

Yours is painful to read.

>>You go to Best Buy and purchase a television on credit to be paid back on the terms of your cardholders agreement.
Then you call up Comcast to establish programming services for this device you bought autonomous of Com...
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thebriang

Dec 9, 2015, 2:09 PM

Sweet, screw it up for everybody Deep Thinkers...

So wait?!? If I buy or lease a phone from someone, I have to pay for that phone to be able to use that phone? You mean they have some magical method of preventing me from using that smartphone on their cellular network?!?! Astounding...

Wait, I mean its a scam, the man is taking advantage of me, trying to make me pay for that thing I signed that legally binding piece of paper saying I would pay for. And now you won't let me use that phone I technically stole from you? I should file a class action.

I hope this lawsuit gets body slammed and then elbow dropped in court, of course customer direct financing makes the carrier more profit in the end and of course it passes the financial liability for the cost of the handset to the custom...
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MadFatMan

Ha! You Actually Get It!

...

Papeng27

Dec 9, 2015, 10:10 AM

Lol!

>>>The groups say T-Mobile links month-to-month service with two-year equipment financing plans, which are, in effect, contracts that result in financial penalties if broken.

-Any major carrier have device plans. As for T-Mobile, the customer is actually given an option to get the phone he/she likes through installments without paying any large amount upfront. If he/she cancels his/her account, she will only have to pay the total remaining installments on the phone's price. Nothing much, nothing more. That is not a financial penalty.

>>>>>Moreover, the groups say T-Mobile engages in an abusive pattern of debt-collection practices by providing customers with little or no warning before sending debt to collection agencies, and by provid...
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Tofuchong

Dec 8, 2015, 10:43 AM

Garbage

The EIP (Equipment Installment plan) agreements simply say that if you cancel your service, you owe the remaining amount due on the phone, which makes obvious sense. Also, by virtue of somebody having an EIP, they agreed through email by giving their electronic signature to the agreement. Whenever I agree to a contract or anything like that, I always read all the fine print. All of it. Maybe if these dumb consumers had done that, they wouldn't put themselves into this predicament.

Oh, and also the Jump on Demand leasing program is only 18 months, not 24 (2 years).

thenewempire

All true. There are no fees other than what you owe on the phone you promised to pay for. It's a loan, not a service agreement. Ignorant fools wasting time going after a company who is changing the industry for the better every day. Oh and when y...
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DrCubanB

Don't know about the collections practices cause I pay my bills on-time.

legal wise their marketing is technically correct because they advertise no "service agreement", but it is kind of deceptive because the Jump On Demand is a lease contract t...
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Zpike

>>Whenever I agree to a contract or anything like that, I always read all the fine print.

You hit the nail on the head. It's a contract... which wouldn't be a problem if they didn't advertise, "No Contract." This is exactly the sort of thing false...
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