T-Mobile’s contract shake-ups have turned the company into the fastest growing carrier in the US. However, the company has now come under scrutiny for allegedly misleading customers with its advertisements.
Consumer advocacy groups have filed a complaint with the New York Attorney General’s office and the Consumer Financial Protection Bureau in a letter that alleges “deceptive marketing and abusive debt collection practices” against T-Mobile. More specifically, the group is raising issue with T-Mobile’s claim that customers can switch carriers any time, as apparently 91 percent of its customers are on two-year payment plans for devices that require lump sum costs to exit from.
Furthermore, the complaint points out that ending the financial agreements early can end up costing consumers more than if they broke traditional service contracts. However, T-Mobile clearly outlines the terms of any loans to consumers when they sign up.
“We ask T-Mobile to reform its own practices by no longer using the misleading language around no contracts … We ask that it stop claiming that it pays customers’ early termination fees” – Nell Geiser, Change to Win.
It’s worth noting that official regulatory bodies have not brought any accusations against T-Mobile at this point, it is only a number of groups that have signed a letter asking for an investigation. The group also plans to bring its complaint to the Federal Communications Commission and is similarly concerned about other US carriers as well.
T-Mobile has found itself the target of the campaign because it has been leading the charge to do away with strict contracts. The carrier has risen to popularity thanks to its “un-carrier” campaign, free video streaming plans and various other offers. The company was also just voted best wireless carrier in the US by Consumer Reports readers on Monday.
T-Mobile has not officially responded to the allegations, but CEO John Legere says that the company stands by its ads.