Were There Ulterior Motives in T-Mobile False Advertising Claims?
In an attempt to enter relevancy again, T-Mobile is undoubtedly using the underdog card to its advantage. But it’s possible that some see that as an open invitation to have their way with the carrier.
At CES, T-Mobile announced a new partnership with the MLB and announced its aggressive rollout of its new LTE network. In late March, T-Mobile held an event in New York City to unveil it’s new UnCarrier marketing push, a move away from the ominous two-year agreement – or a subsidized contract – in its typical connotation. It was, effectively, a smack to the back of the head of the larger, “bully” carriers.
T-Mobile introduced its new, no-nonsense Simple Choice Plans, and introduced a new buying model. New customers can either bring their own phone, purchase a new smartphone at full retail price, or they can pay a specified portion of the price and finance the rest over the course of 24 months without any interest. There are no service agreements, nothing to tie the consumer into a specific plan or T-Mobile service for any amount of time. Consumers can come and go as they please.
They only agreement the consumer must sign is when financing a phone. The customer agrees to pay the remaining balance on a phone they have financed, once they choose to leave. In other words, if you paid $99 for the iPhone 5 and paid on it for six months, you would have paid $219 of the $579 total owed, meaning you would have to pay an additional $360 to be in good standing with T-Mobile.
So far, everything seems pretty straightforward and simple, right? That was T-Mobile’s whole point to this new marketing campaign, the new plans, the new agreements (or lack thereof), etc.
Unfortunately, Bob Ferguson, Washington State Attorney General feels T-Mobile is being misleading. On April 25, it was announced that T-Mobile signed a court order filed by Ferguson 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 explained. I suppose he failed to consider how deceptive practically every other wireless carrier in the States has been since … the beginning of time. He went on to say, “My office identified that T-Mobile was failing to adequately 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.”
Ferguson and his office are implicating T-Mobile for “deceptive advertising that promised consumers no annual contracts while carrying hidden charges for early termination of phone plans.” It doesn’t take rocket appliances to understand that you’re liable for the full amount of a device that you’re financing.
To that end, I can count the number of times on a single hand when I’ve signed a contract with a carrier (all four of the major providers in the U.S., some more than once), whether it be for an upgrade or new service, that it has been disclosed with me that I’m required to pay an early termination fee if I decide to cancel my service before my contract is up. It’s all written in the agreement itself. But who, after spending upwards of an hour buying a new phone, wants to sit and read a three-page legalese document explaining every specific scenario in which you are liable to pay some sort of fee? No one.
In fact, upgrade fees, service fees and other inexplicable charges pop-up on my wireless bills all the time. Apparently, though, T-Mobile is the only company officially accused of being misleading?
Most mobile consumers in the United States don’t even understand subsidies, or know the actual retail value of a smartphone, for that matter. And all of the sudden, a Washington State Attorney General tightens the screws on T-Mobile, the first carrier bold enough to break from the corrupt mold?
I asked a friend, David Beren of TmoNews, the T-Mobile guy himself, for his take on the matter. He said:
“While T-Mobile should have made the terms of their service more transparent from the get-go, one can’t help but look at the politics of the Washington State decision. It just so happens that the state Attorney General, Bob Ferguson, has received campaign funding from both AT&T and Verizon. It doesn’t hurt that Ferguson will seek re-election one day and might want to draw on the coffers of AT&T and Verizon to help fund his next campaign. I’m not suggesting this was a pure political move done at the behest of AT&T, but there’s plenty of room to suspect that Ferguson may have had an agenda in his quest to slap T-Mobile on the wrist.”
Was there an ulterior motive? Was Ferguson acting swiftly to silence the controversial no-contract push from T-Mobile, which ultimately comes at the expense of the “bully” carriers, AT&T and Verizon, who just so happened to help fund his election campaign?
I’m not one for conspiracy theories, but something certainly smells fishy in this whole ordeal. That, or Ferguson and whomever helped push this court order through seriously need a crash course on how the wireless industry works, how the U.S. wireless industry is unique (read: archaic, corrupt, consumer un-friendly, etc.) and how T-Mobile is the first carrier ballsy enough to break from the mold and be open and honest with pricing, device financing and contract-free.
Sound off in the comments while I go take some medicine for this headache.
Image via Digital Trends