T-Mobile forced to revamp no-contract marketing campaign

By on April 25, 2013, 6:30 PM
t-mobile, wireless provider, marketing campaign, no contract plan

T-Mobile has garnered a ton of attention as of late over the recent launch of their no-contract wireless plan. Of course, not all of that attention is desirable. One example of that is the attention of Washington state Attorney General Bob Ferguson, who recently called out T-Mobile over deceptive marketing tactics related to the contract-free plan.

Ferguson’s beef with T-Mobile has to do with their “no strings attached” claim. While it’s true that users aren’t locked into a contract and can leave any time they want, the AG said T-Mobile is failing to disclose the fact that consumers would be responsible for paying the entire balance of a smartphone all at once if they do leave (granted they opted for the monthly installment plan).

For example, let’s say a customer buys a new iPhone which retails for $650 without a contract. The customer would pay around $150 up front for the phone and make $20 payments on it each month until it is paid off. If that customer decided to leave T-Mobile after two months, they would still owe $460 for the phone – far more than they would be charged for an early service termination fee.

Ferguson described this as a surprise “balloon payment” which he believes T-Mobile isn’t doing a good enough job of outlining to customers.

In response, T-Mobile has agreed to stop advertising the plan as one with no restrictions. Furthermore, they will now disclose this facet of the plan to consumers before they sign up. Customers that purchased a phone and plan between March 26 and April 25 can elect to receive a full refund on the device and cancel their service plan without penalty if they wish.




User Comments: 19

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4 people like this | Guest said:

Quote: "the AG said T-Mobile is failing to disclose the fact that consumers would be responsible for paying the entire balance of a smartphone all at once if they do leave (granted they opted for the monthly installment plan)." Unquote

This is 100% complete and plain common sense. Who wouldn't understand this?

Guest said:

How about their unlimited data claim?

You buy unlimited data, and after 5GB downloaded your internet becomes useless, to the point where you can't even open a website.

Guest said:

On the other hand, if you leave with after 23 months, you'd only pay $20 ($500 - $20 a month for 23 months) on T-Mobile and AT&T would still charge you $95 ($325 - $10 a month for 23 months)

Guest said:

That's definitely false. Stop spreading lies. Their unlimited 4G gives you unlimited 4G, simple as that. They also reserve the right to throttle you down if you are abusive with your data (tethering when not subscribed for that, excessive data consumption on a regular basis which might effect other users).

Guest said:

Right?

How is this Attorney General too stupid to realize you have to pay for something you buy?

Albeit, I don't know if T-Mobile takes the phone back from you after you leave, but seeing as I have more common sense than Bob Ferguson, I would think that you get to keep the phone.

For the man who wrote in caps lock. I am sorry about your wife. The store rep was probably related to Bob Ferguson. If you still have the problem, I would **** the stupid base level employees you find in the stores and contact T-Mobile directly. Best Wishes to you and your wife.

I also recommend Gerson Therapy and laughter, Keep both your spirits as high as possible.

1 person liked this | p51d007 said:

About 2/3 of the low information voting public.

Quote: "the AG said T-Mobile is failing to disclose the fact that consumers would be responsible for paying the entire balance of a smartphone all at once if they do leave (granted they opted for the monthly installment plan)." Unquote

This is 100% complete and plain common sense. Who wouldn't understand this?

1 person liked this | Guest said:

Using data you paid for shouldn't be throttled unless made VERY clear at the onset of the agreement. If T-Mobile were to say "although we advertise unlimited, we only want you (the customer) to use no more than 5 gigs at which point we will throttle you with extreme prejudice!" Then, as a consumer, you can make a choice to proceed or go somewhere else with you business. Frankly, punishing paying customers is never a good practice. Furthermore, it really shouldn't matter how you access your data (phone, tablet, tethered to a phone, etc.) however, for the sake of keeping things simple, just using a smart phone to watch Netflix or some other streaming service should not get a customer throttled. If using 5 gigs or more causes the network to slow for several customers in your area, perhaps the network is not up to snuff in which case T-Mobile or any other carrier should stop advertising unlimited or superior network coverage, etc.

1 person liked this | Guest said:

Yeah, since when did the word "unlimited" become synonymous with the phrase "some amount that we may deem to be too much, at which point you'll get cut off" ? If you can't provide unlimited data/downloads then don't advertise unlimited. It's as simple as that. What's with this guy saying it's unlimited as long as it's less than 5GB a month and you're not being "abusive" ? When I pay for unlimited, I expect unlimited and no amount should be deemed abusive. That is the REASON I bought unlimited, so that I can download as much as I want, without it being considered abusive.

LesSavvy LesSavvy said:

How about their unlimited data claim?

You buy unlimited data, and after 5GB downloaded your internet becomes useless, to the point where you can't even open a website.

Right, because they didn't disclose that when you chose that plan. Also, no different than most carriers "unlimited" plans.

Mbloof said:

I'm a TMobile customer and YES they disclose that they will 'throttle' your data to 2G rates if you go over the amount of 4G you paid for. Lets be honest - 2G is not completely 'worthless' as others may claim.

However, the entire miss use of 'unlimited' by all data providers is something the FTC/AG SHOULD address. (the entire 'upto' data rate claims ought to get tossed as well)

psycros psycros said:

I'm a TMobile customer and YES they disclose that they will 'throttle' your data to 2G rates if you go over the amount of 4G you paid for. Lets be honest - 2G is not completely 'worthless' as others may claim.

However, the entire miss use of 'unlimited' by all data providers is something the FTC/AG SHOULD address. (the entire 'upto' data rate claims ought to get tossed as well)

2G throttling IS completely worthless because its not just 2G - its the *very bottom end* of 2G. Try living with 30kbs for about half of every month. Nothing works right, not even email most of the time. Music, video, online gaming..even browsing sites with significant graphics content is nearly impossible. I should know because this is what I put up with thanks to the lack of service options in my area. Even basic web surfing, a VERY small amount of music streaming and sending a few pics on my phone will eat up 2.5gb in two weeks or less. The cell carriers pushed multimedia phones and always-connected everything *hard* for six years, while simultaneously REDUCING the amount of data we could actually use. Thanks to our bought-off politicians we tolerate this absurdity in North America. Anywhere else in the world the courts would be all over this kind of racketeering.

Guest said:

@psycros

why not start a cellular data company and open it wide open. Everyone would love you and flock to you right?

hint: there is a reason why cell companies have limits, its to stop abuses from the EXTREME small percentage of user base using an EXTREME disproportional amount of company resources If you know how to do it better, then start a company and show them how its done.

treetops treetops said:

They should simply allow customers to continue to make monthly payments to pay it off not a now you have to pay all at once underhanded tactic to bully people into not keeping their monthly prepaid plan.

That's like you dropping your home owners insurance the bank demanding you pay everything you owe on the house as a result. Well not that steep but still BS.

wiyosaya said:

Right?

How is this Attorney General too stupid to realize you have to pay for something you buy?

It sounds like the advertising that he is objecting to does not make it clear you are buying a phone and cannot return if if you decide to terminate your service. Since he recognized that there is a requirement to pay off the phone that was bought, he is not too stupid. However, there are plenty of people out there who are not as technical as even the most uneducated TechSpot reader - believe it or not, and to me, those are the people that he is trying to protect with this.

If there were no strings attached, anyone would be able to return the phone at any time they decide they no longer want the service; however, it sounds like the phone is not returnable in the vast majority of situations, and he is simply forcing T-mobile to outright state "you are buying the phone, and it is not, in any manner, returnable."

Personally, I agree with this. A phone that cannot be returned is not a "no strings attached" offer.

MilwaukeeMike said:

It sounds like the advertising that he is objecting to does not make it clear you are buying a phone and cannot return if if you decide to terminate your service. Since he recognized that there is a requirement to pay off the phone that was bought, he is not too stupid. However, there are plenty of people out there who are not as technical as even the most uneducated TechSpot reader - believe it or not, and to me, those are the people that he is trying to protect with this.

Personally, I agree with this. A phone that cannot be returned is not a "no strings attached" offer.

I just signed up for T-mobile this week. When I bought the phone they gave me the standard Federal Truth in lending form that you'll get when you buy a car, buy furniture with a payment plan, or even a gym membership that you pay for over time. It's not an issue of being technical or understanding phone contracts, it's an issue of being an accountable adult. You buy something you pay for it. You change your mind, you can go sell it. If you don't understand this, then you shouldn't have signed the paper. T-mobile even advertises front and center on their site that you don't need to buy a phone, you can bring over your old one if it has a SIM card.

The scary part isn't that the attorney general doesn't understand this, it's that he knows there are plenty of Americans who will see this as a loophole to trying to get something for free. I once witnessed a grown man at McDonalds try to convince the manager that he should get a 2nd Big Mac because the first one he received didn't have cheese and he wanted cheese. He wouldn't accept adding cheese or a traded sandwich, he wanted a new one and to keep the first one because he said 'that's the law'.

It's shocking what some people believe.

MilwaukeeMike said:

2G throttling IS completely worthless because its not just 2G - its the *very bottom end* of 2G. Try living with 30kbs for about half of every month. Nothing works right, not even email most of the time. Music, video, online gaming..even browsing sites with significant graphics content is nearly impossible.

Lol, they have a name for that network, it's called Sprint.

Fbarnett Fbarnett said:

I'm a TMobile customer and YES they disclose that they will 'throttle' your data to 2G rates if you go over the amount of 4G you paid for. Lets be honest - 2G is not completely 'worthless' as others may claim.

However, the entire miss use of 'unlimited' by all data providers is something the FTC/AG SHOULD address. (the entire 'upto' data rate claims ought to get tossed as well)

Why does anybody need more than that anyways? I have wireless in my home and everywhere I go.

We even have indoor plumbing!!

MrAnderson said:

T-Mobile should open a line of credit for the phone payment for each customer. Maybe this credit could also be used to purchase other one time services. Make it 0% interest if paid off by a time frame and if customers no longer want to use T=Mobile, let the interest rate go up, but let customers pay off the rest of the bill over time like any other credit line. Make sure this is very clear.

Better yet, T-Mobile could advise customers to use a 0% credit card to purchase the full cost of the phone and partner with a set of banks to provide this credit so T-Mobile does not need to incur any additional costs (monetary nor administrative) to pay for the consumer phones.

Guest said:

So many people can't read, apparently, just like the attorney general. Even here, everyone is spouting off about T-Mobile without actually reading about their plans.

T-Mobile does offer unlimited data on all of its plans.

You have an unlimited quantity of data and you will never be charged an overage if you go over a specific amount.

They do not offer unthrottled data speeds for free. They offer an unthrottled tier for an extra amount, which will never receive overages or be throttled for normal use, but you do have to pay extra.

If you dont want to pay extra, you still get unlimited data. It will just be EDGE/2G data which is still perfectly acceptable for things like SMS over data, very light e-mail checking, light web browsing, but if you're expecting to stream Youtube and video chat all day, you're not going to be able to do that unlimited for free.

What an ***** Attorney General. Of all of the crappy Networks out there that rape their customers each month at the same price regardless of whether you're in contract or not, or brought your own device or not, he goes after T-Mobile which is trying to spur some innovation/competition.

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