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Wash. Attorney General Exposes T-Mobile's Un-Carrier Claims

A good deal of us seem to know exactly what T-Mobile is up to despite the current "un-carrier" advertising: customers are still locked to a two-year "agreement", only it's now through financing a phone instead of committing to a wireless plan. T-Mobile has essentially become a smartphone "dealer" while offering an optional wireless service… or so we thought.

Washington State Attorney General Bob Ferguson has revealed the "un-carrier" plan for what it really is, and is forcing the wireless carrier to change how it promotes its new scheme. Many customers may now qualify for a full refund, depending on when they signed on.

According to the Washington Attorney General, T-Mobile still sticks customers with an "early termination fee" despite the "no-contract" and "no restrictions" promises. Naturally the wireless carrier hasn't mentioned this in its current "un-carrier" ad campaign online, in print and on TV. However a court order signed by T-Mobile now changes that deception.

"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 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."

From here on out and across the nation, T-Mobile must disclose that there are restrictions to the plan after all. 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," the Attorney General's office stated. "Instead of a 'two-year sentence' for wireless service, consumers face a different two-year 'sentence' to avoid a lump-sum balloon payment for the phone."

On Thursday T-Mobile signed an Assurance of Discontinuance that states it agrees not to misrepresent consumers' obligations under its contracts, and to not fail in fully disclosing to consumers that the balance must be paid in full if they decide to terminate wireless services early. The company must also contact consumers who purchased telephone equipment under the terms of their new business plan to advise them of their right to cancel and obtain a refund.

"All consumers who purchased T-Mobile service and equipment between March 26 and April 25, 2013, can obtain a full refund for their telephone equipment and cancel their service plans without being required to pay the remaining balance owed on their devices— as long as the customer cancels his or her service per the terms of the agreement, including returning the equipment to T-Mobile," the Attorney General's office stated.

Consumers can call T-Mobile at 1-877-746-0909 for more information or dial 611 from their T-Mobile telephones.

Kevin started taking PCs apart in the 90s when Quake was on the way and his PC lacked the required components. Since then, he’s loved all things PC-related and cool gadgets ranging from the New Nintendo 3DS to Android tablets. He is currently a contributor at Digital Trends, writing about everything from computers to how-to content on Windows and Macs to reviews of the latest laptops from HP, Dell, Lenovo, and more. 

  • bustapr
    so basically, you sign a contract for a phone. but you HAVE to have use that phone for 2 years on T-Mobile's service. if you decide to stop using the service, you HAVE to pay the rest of you phone in one shot. that is DIRTY!
    its almost the same as before, but with a prettier coat. glad some big name lawyers are finally leaving the dark side xD
  • Truckinupga
    We need more action like this, But not just on national company's but on a local scale too.
    I'm locked into a 2 yr contract with my local ISP who lured me in with a low rate only to continuously increase the price every couple of month's. When I complain and request to be disconnected they only remind me of penalties it would cost me to do so, So here I am taking there crap and paying more and more.
  • jumbicito
    Uh-HUH! So.... you are given the option of buying a phone outright and not being tied into a contract or you give a down-payment and finance a phone with no interest for 24 months. The only thing I don't see T-Mobile advertising is the fact that you also have to pay the taxes up front. I see nothing dirty in this. This is apparent in any of the ads for the 'un-carrier'. I applaud T-mobile's approach. And their advertising tactics.
    You give a down-payment, pay your monthly fees, don't like the service?- pay for your phone in full and go to another carrier. simple.
  • Joseph Scott
    This article misrepresents what T-Mobile is trying to do. They are taking away the smoke and mirrors of phone subsidy's and allowing people to bring their own phones or pay a down payment and pay payments while they own the phone in addition to the phone service. if you already own a phone you do not have to pay the subsidy like other carriers. I guess the other carriers are scared so they are calling in their political friends to raise false claims against t-mobile. Also the total amount being paid is less then the subsidy amount being charged by the other carriers. They make a killing off of financing phones for people. These subsidy's on other plans of course are totally hidden and unaccountable and they do not go away once the phone is paid for!
  • sykozis
    Ummm.... I don't see the issue here. T-Mobile is financing the phone. It works the same as financing a car. You can't legally sell a car in most states without paying off the loan you got to buy a car. Also, you're not forced to have service with T-Mobile for 2 years because as with most loans, you can pay it off at any time. It's time for people to learn how to actually read.
    When I left Verizon for T-Mobile, it was very clearly explained to me. I could either buy the phone outright or finance the phone through T-Mobile. If I financed the phone through T-Mobile I'd have up to 24 months to pay it off. If I decide to leave T-Mobile, the balance of the "loan" was due in full at the time the service ends. I have an option to make additional payments towards the balance of the phone or pay the phone off at any time during the 24month financing contract.
    Maybe this idiot should force Verizon, Sprint and AT&T to finally admit that the cost of the phones are built into the cost of their plans so they don't actually lose money on these "subsidized" phones.... I mean, he's clearly trying to protect consumers (more like the 'big 3') why not force them to be honest about their pricing... I get sick of idiots like this guy trying to make a name for themselves by picking on a company that's actually trying to become consumer friendly while their competitors are doing everything they can to rip off consumers.
    Truckinupga... My ISP tried that several times. Until I got pissed off and called asking for their legal department to discuss contract law. I signed a contract guaranteeing my service for $109.99/month for 24 months. I was paying $134.99 when I finally demanded to talk to their legal department. My price returned to the contract price very quickly when the customer service supervisor was told exactly what was going on and why I wanted to talk to their legal department.
  • bustapr
    @joseph, the point of this article isnt to point out the network deals on phones you bring to the service. its to point out the scam on phones you buy from them with a new contract.
  • Unbelievable. THIS is what the AG finds deceptive? How about John Corzine.
    If I go to a merchant and opt to finance a product for 24 months, it's clear I own the device in good faith until I finish my last payment. OF COURSE if I kill my relationship with that vendor I will be expected to pay off what I owe! Who in their right mind doesn't expect that?
    People who think they're entitled to a free phone, that's who. The only deceptive thing I see in all of this is the AG claiming he's done some good for people to stupid to understand they're responsible for paying their debt.
    This is crazy, and absolutely underscores why this country is in the horrendous shape it's in.
  • jb1376
    I don't see how T-mobile could be any clearer. Month to month service. Don't like it? Okay move on. You can bring your own phone over to use on their network or you can finance "interest free" the phone you want with down payment. The price you pay for the phone is what you would pay for the phone from apple or samsung or where ever you buy it. If you finance you have a debt and responsible for the debt.
  • Anpadh
    What T-Mobile is doing here is VERY sneaky. It's like being forced to go to the dealer for service as long as you finance your car. And if you choose to get your car serviced elsewhere, you must pay off the car in full! That's ridiculous! It doesn't matter whether you finance your car over five months or five years or more. You should be able to get service at any place of your choice. Of course, you still continue making payments on your car, regardless where you go for service. I'm very glad T-Mobile's been caught! Now, neither T-Mobile nor any other carrier will be able to continue this unethical practice. Here's one AG who is doing his job and doing it well. Thank you, Mr. Ferguson! And keep up the good work.
  • ryude
    I registered just so I could chime in with this.
    Say you sign a 2 yr contract with AT&T, you buy the Galaxy S4 and pay $199 up front. You also choose to get the unlimited everything plan because you always want to use data. Let's calculate the costs over the 24 month term:
    $199 Smartphone
    + $36 Activation Fee
    $235 Up Front Cost
    $69.99/mo Unlimited Talk
    + $50/mo Data Pro 5GB
    + $20/mo Messaging Unlimited
    $139.99/mo Service Cost
    x 24 Months
    $3359.76 24 Month Cost
    + $235 Up Front Cost
    $3594.76 Total 2 Yr Cost
    Now let's calculate T-Mobile's 24 Month term, including up front costs.
    $199 Down Payment Smartphone
    + *No Activation Fee
    $199 Up Front Cost
    $70 Unlimited everything (no throttling at all, truly unlimited)
    + $20 Payment Plan
    x 24 Months
    $2160 2 Yr Service Cost
    + $199 Up Front Cost
    $2359 Total Cost
    Add to that fact you can save $20/mo if you bring your own phone AND there is no contract! How can anyone think T-Mobile is scamming?