AG Tells T-Mobile to Hang Up No Contract Claims

April 30th, 2013

It didn’t take long for cellphone users who didn’t want to be married to one provider through extended contracts to cry foul over a national cell service carrier’s promise not to tie them down.

Within a month of announcing its new contract-free plan, T-Mobile got slapped by the Washington State Attorney General for allegedly failing to disclose hidden early termination charges.

T-Mobile was trying to tap the market of a rising number of cellphone users who don’t want to sign multi-year service contracts with providers. One out of every three cellphone users opt for pay as you go plans.

In March, the company unveiled a new  “un-stuck” plan, promising “no restrictions” and “no annual contract.” T-Mobile said,

We’re still a wireless carrier, [sic] we’re just not going to act like one anymore.

But Washington State Attorney General Bob Ferguson said only customers who didn’t purchase phones from T-Mobile using a 24-month payment plan were eligible to cancel contracts at no cost. Customers who purchased phone equipment through the monthly payment plan didn’t get the same perk. Said Ferguson,

…T-Mobile was failing to adequately disclose a critical component of their new plan to consumers.

T-Mobile didn’t make it clear in its advertising, according to Ferguson, that customers who canceled their wireless service faced an unanticipated balloon payment for the phone equipment, which in some cases was higher than termination fees for other wireless carriers.

Under a court-ordered agreement, T-Mobile has to:

  • Make clear to customers the consequences of canceling T-Mobile service,
  • More clearly state in all advertisements the true cost of telephone equipment
  • Instruct representatives to fully disclose obligations under the terms of the contract
  • Allow customers to 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.

Consumers who purchased T-Mobile service and equipment under this new plan between March 26 and April 25, 2013 who want to cancel or get a refund can contact T-Mobile at 1-877-746-0909 or dial 611 from their T-Mobile phones.

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