(The following is a reformatted version of a press release
issued by Washington State Attorney General Bob Ferguson and
received via e-mail. The release was confirmed by the sender.)
April 25, 2013
Attorney General says “No Dice” to T-Mobile’s deceptive “No-Contract” advertising
Early cancellation of phone plans results in undisclosed balloon
Telephonic media availability at 11 a.m. Pacific
OLYMPIA - Washington State Attorney General Bob Ferguson has
ordered T-Mobile to correct deceptive advertising that promised
consumers no annual contracts while carrying hidden charges for
early termination of phone plans.
Today, the Attorney General’s Office filed a court order signed
by T-Mobile and effective nationwide that will ensure the
company clearly communicates the limitations of its new “no-contract” wireless service plans and allows customers duped by
the deceptive ads to exit their contracts with no penalty.
“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.”
T-Mobile recently launched a new type of wireless service plan,
claiming to offer “no restrictions,” “no annual contract” and no
requirement that the consumer “serve a two-year sentence.”
However, this new plan does not include a phone. Instead, the
company provides the option for consumers to purchase a phone at
a monthly rate over a two-year term. They also offer the
opportunity to bring your own phone or pay the entire cost of
the phone up front.
After an investigation of the company’s practices, the Attorney
General’s Office learned that the company failed to disclose
that 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 phone if
they cancel earlier.
Consumers who cancel their wireless service face an
unanticipated balloon payment for the phone equipment - in most
cases higher than termination fees for other wireless carriers
depending on how early they cancel. 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
T-Mobile cooperated with the Attorney General’s Office in
signing an Assurance of Discontinuance (AOD) filed in King
County Superior Court today. Under the AOD, the company agrees
• Misrepresenting that customers can obtain wireless service
and telephone equipment without restrictions; and
• Failing to disclose that customers who terminate their T-Mobile wireless service before their device is paid off will
have to pay the balance due on the phone at the time of
All consumers who purchased T-Mobile service and equipment
between March 26 and April 25, 2013, may 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.
The company is required to 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.
Consumers can call T-Mobile at 1-877-746-0909 for more
information or dial 611 from their T-Mobile telephones.
The company also agrees that it will:
• Not misrepresent customers’ true obligations under the
terms of its contracts for the sale of service or equipment;
• Make clear the consequences of cancelling T-Mobile service,
including restrictions or limitations on cancellation; fees and
costs; and early termination fees;
• More clearly state in all advertisements the true cost of
telephone equipment, including the requirement the customer
carry a wireless service agreement for the life of the 24-month
• Instruct representatives to fully disclose obligations
under the terms of its contracts, including developing a
“Frequently Asked Questions” page; and
• Train customer service representatives to comply with the
settlement within 21 days of signing.
The AOD requires T-Mobile to pay attorneys’ fees and costs to
the Attorney General’s Office in the amount of $26,046.40.
Janelle Guthrie, Director of Communications, (360) 586-0725
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