The same day that T-Mobile was, it’s been discovered that Magenta is being targeted for alleged false advertising.
New York Attorney General Eric Schneiderman isthat T-Mobile’s ads are misleading. Schneiderman has yet to offer an official statement on the matter, and spokesman Eric Soufer declined to share any comment due to “ongoing” investigations. However, USA Today says that Schneiderman’s office isn’t the only one targeting T-Mobile because of its advertising.
A letter accusing T-Mobile of “deceptive marketing and abusive debt collection practices” has been sent to the Consumer Financial Protection Bureau, says USA Today. The letter says that T-Mobile’s equipment installment plans, which spread the cost of a phone out over 24 months, contradict T-Mobile’s ads that say that customers can change carriers at any time. The CFBP complaint also says that if a customer ends their EIP before paying their phone off, they may be referred to a debt collection agency “with little or no notice.”
Meanwhile, Change to Win is asking that T-Mobile stop “using the misleading language around no contracts” and that it “stop claiming that it pays customers’ early termination fees.” Change to Win plans to complain to the FCC. And then there’s Color of Change, a group that says T-Mobile “tell customers one thing and they give them something completely different.” Rashad Robinson, Change of Color’s executive director, added that “our main concern is the bait-and-switch.”
.Ridiculous headline to sensationalize un-seen claims! Makes me think you were suckered? OR you in someone’s back pocket?
— John Legere (@JohnLegere)
T-Mobile spokeswoman Annie Garrigan did not comment on the USA Today report. John Legere did, though, with the CEO saying that the report has a “ridiculous headline to sensationalize un-seen claims.”
While many of us understand how T-Mobile’s EIP works, headlines and reports like these could give would-be T-Mo switchers some pause. These groups appear to feel that T-Mobile advertises itself as having no contracts, but that T-Mobile doesn’t make it clear enough that customers that get their phone for $0 down and $29 per month (or whatever their phone’s monthly payment is) are just spreading out the full cost of the phone and that they’ll have to pay the balance if they end their EIP early. T-Mobile does mention this, but it seems that these groups feel that those statements aren’t clear enough. Perhaps T-Mobile could better explain that if you cancel your EIP, you’ll need to pay it off all at once.
It remains to be seen how T-Mobile will respond to these claims, but with so many groups targeting Magenta, it probably wouldn’t hurt to make some sort of response beyond John Legere’s Tweet.