Consumer organization says Sprint's promotion of its 50% off Apple iPhone X deal is misleading
by Alan Friedman / Mar 08, 2018, 11:34 AM
If you're a member of Sprint's iPhone Forever program, you can return the iPhone X after 12 payments and exchange it for the latest model. At that point, the 18-month lease starts anew. If you aren't a member of that program, or fancy another phone, after 12-monthly payments you can exchange your iPhone X for that new handset you want. This will require a $5/month add-on to the lease price, and the 18-month lease period starts over.
At the end of the 18-month period, if the Sprint subscriber is still leasing the iPhone X from Sprint, he or she can buy the phone by paying the difference between the cost of the device and how much he/she has already paid for the lease. That amount can be paid over 6 months. Bottom line, any Sprint subscriber who takes advantage of the 50% off the Flex Lease payments for the tenth anniversary Apple iPhone will save about $100 if he/she ends up purchasing the device.
The problem here, according to ConsumerWatchdog.com's John Simpson, is that Sprint has been using headlines on its website that read "The unrivaled iPhone X for 50% off." Simpson says, "That, to me, is a clear offer that I'm getting an iPhone at half price." But we have to wonder about Mr. Simpson's reading comprehension because immediately under the headline, the carrier writes "Get the unrivaled iPhone X for just $20/mo. with Sprint Flex lease." On the screengrab of Sprint's website that you will find at the top of this story, we highlighted that sentence for Mr. Simpson in yellow so that he could see it next time he visits Sprint's site (and no, we didn't pick yellow because his last name is Simpson).
We are sure that ConsumerWatchdog.com must do plenty of good things for consumers to make sure they aren't ripped off, and that is very important. But in this case, it seems that a little more effort on the part of the organization would have allowed them to understand that this was a lease from the get go. A Sprint spokeswomen said that the company was very careful with the wording of the promotion and she blames writers of non-Sprint related publications for the confusion.
Posts: 5; Member since: Mar 08, 2018
Purchasing the latest iPhone / Galaxy device automatically enables the yearly upgrade option, you DO NOT have to pay an extra $5 to get a yearly upgrade unless it's an older iPhone / Galaxy.
posted on Mar 08, 2018, 12:53 PM 0
Posts: 65; Member since: Apr 10, 2012
Consumer Watchdog got this completely wrong. $20 x 18 months = $360. There is a lump sum of 6 payments that can be paid at the end of the lease to own the phone outright. That would be another $120. $120+$360 = $480, or 48% of the $999.00 MSRP. Sprint's wording of 50% actually implies you are paying more than you actually are if you pay the phone off after 18 months. It should be noted that Sprint allowed some Essential Phone buyers to pay off all of the lease payments after something like 3 months of service when they were offering the $5 lease option. People were paying like $200 after taxes and fees for a $500 device. This is a similar deal on a similar product. (Taxes & fees withheld in calculations) In the scenario that purchase price is indeed the difference of the MSRP of the phone and not just 6 more lease payments, Sprint doesn't retroactively reverse the $21.67 credit for the last 18 months. That $390.06 is still a savings. So even if you have 6 more months of $41.67 left, that is $250.02 + $360 in original lease payments for a total of $610.02. Not once are you only saving $100, PhoneArena. I looked at the How it Works section of Sprint's iPhone X page. If I am misunderstanding it, please let me know.
posted on Mar 08, 2018, 2:32 PM 1
Posts: 560; Member since: Mar 21, 2012
I never said that that the remaining price included 6 more lease payments. What I said was that after 18-months, the difference between the MSRP and the total number of lease payments made will be your price to purchase the phone. And that figure can be broken into 6 monthly payments. Regards, Alan Friedman
posted on Mar 08, 2018, 4:47 PM 1
Posts: 65; Member since: Apr 10, 2012
I think there are two challenges with this article, Alan. First, the math behind the savings which is why I provided two common scenarios. The credited amount is never asked back. The second is the sloppiness of the reporting from KansasCity.com. ConsumerWatchdog.com is for sale for $94,888 and currently doesn't have content. ConsumerWatchdog.org is a site with reporting. John M. Simpson works for this organization as the Privacy Project Director. However, going to ConsumerWatchdog.org and searching 'iPhone X' yields no results. There is no reputable source linked to KansasCity.com's quotation of Mr. Simpson's remarks. In fact, a search for 'iPhone' reveals the last post on ConsumerWatchdog.org to have been made 07/27/2017 at 11:34pm. This was all discovered with 5-10 minutes of web searching. This article from KansasCity.com should have been debunked. Perhaps it could have even been validated through similar research. That is what I believe you are being paid for, Alan. I read most, if not all of the articles PhoneArena publishes. I'm not terribly active in the comments because I like to avoid trolls. I feel that one of the biggest areas PhoneArena can improve is in validating their sources. I have been enjoying PhoneArena articles for many years, and I appreciate the work you and your coworkers put into the articles. At times, it should be more thorough. The only problem I have with PhoneArena is how while you had issue with the phrasing Mr. Simpson allegedly took concern over, the rest of the article, from the math, to the concept of a lease, to their sourcing, is just as sloppy from KansasCity.com and that should have been caught, and been the focus of this article. -Joel
posted on Mar 08, 2018, 7:23 PM 1
Posts: 886; Member since: Jan 30, 2011
I think you’re completely misunderstanding Sprint’s leasing terms (unless they’ve recently changed it). From the last time I read their terms, after 18 months, you pay a “fair market” value for the phone if you decide to buy it. What you have paid in leasing the phone is completely irrelevant. After paying 75% of the MSRP, you will still have to pay what Sprint think the phone is worth in order to own the phone.
posted on Mar 08, 2018, 11:28 PM 1
Posts: 65; Member since: Apr 10, 2012
It very well could have changed. There is a "before 7/14/2017" and "after 7/14/2017" section for the lease details. "Sprint Flex lease (available nationwide 7/14/17) Before month 18: Pay all of your outstanding lease payments along with the Purchase Price Option. At month 18: Pay the Purchase Price Option with one lump sum payment or 6 monthly payments. After month 18: Pay the Fair Market Value price." Also, under "What happens when my lease term is up?" there is this section: "Own your phone:* With a lease agreement (most lease agreements before 7/14/17): When your lease term is complete: Pay the Purchase Price Option. After your lease is complete and you are making month-to-month payments: Pay the Fair Market Value price. With Sprint Flex (available nationwide 7/14/17): At month 18: Pay the Purchase Price Option with one lump sum payment or 6 monthly payments. After month 18: Pay the Fair Market Value price." My understanding from this is that the "one lump sum" remaining is the equivalent of 6 remaining monthly lease payments. In this case that is $41.67 x 6 = $250.02. If during month 18 you skip this option, then you pay fair market value. Fair market value may be higher and it is a bit of a gamble. On Android phones, it might be safer to wait an extra month but on iPhones, they are sure to hold their value for a bit more than 18 months. Options including "before month 18" and "at month 18" seem to indicate that 24 monthly payments satisfy paying the 18 month lease and the payment option. Things change for "after month 18". In summary, Nine1Sickness, yes, I could be misunderstanding this completely. It does seem that Sprint has that as a last resort for those who choose to keep their phone longer than 18 months. As a side note, I wouldn't assume that "fair market value" means Swappa, Craigslist, or even eBay average selling price. I am not saying you or anyone else is, but it is likely that this is calculated by averaging trade-in price from sites like NextWorth and Gazelle. Then fair market value could be that low.
posted on Mar 09, 2018, 4:19 PM 0
Posts: 1261; Member since: Aug 31, 2016
That ad clearly states that it's a LEASE. It's 1 sentence that contains all information necessary to understand the basic terms of the sale. That consumer organization needs to go back to elementary school.
posted on Mar 08, 2018, 2:42 PM 1
Posts: 260; Member since: Dec 19, 2013
This is just one of those things where people try to see misleading info to create a story. USAToday posted a (consumer alert) story on how mortgage payments don't actually pay off home equity evenly. Another story. 20% of cars are SUVs, yet they are involved in 39% of multi car accidents, this is supposed to be alarming: but do the math: if there are 4 cars and 1 SUV. 4 cars would be in multicar SUV accident 20+% of time, but an SUV would be in such accident 100%. Add in 3 and 4 car accidents, and that 39% is close to statistically exact. There's just so many stories where PEOPLE GET FOOLED BY MATH.
posted on Mar 08, 2018, 6:42 PM 2
Posts: 2; Member since: Nov 30, 2012
I've been using phone arena since I was a sales rep back in 2011, but what did I just read? do you even proof-read before you guys write an article now? First off: Everyone that buys an iPhone X on Flex lease gets the iPhone Forever plan, They aren't required to pay 5 dollars a month to upgrade after 12 months. Second: I agree the promotion is a little misleading with saying 50% off, honestly, it should read 50% off sprint flex lease, but that's marketing for you, fine print explains more of it. Now for the math, $100 bucks off is completely wrong. Let's try this again. iPhone X Retails for $999.99. This number is how sprint gets the price of the monthly payments for Flex Lease. Its divided equally over 24 payments. Sprints Flex Lease is made up of 18 payments of the 24 months. This is the Lease Term, if you sign a lease you are agreeing to pay 18 payments. This money goes into paying off the phone. $999.99 divided by 24payments is $41.67 per payment. You lease the phone for 18 payments, during this time you pay $20 of the $41.67, sprint credits you $21.67. Every month, 41.67 is paid towards the device. Sprint does this for 18 months. at the end of 18 payments, you stop getting a credit from sprint, but you only owe the last 6 payments of $41.67 After 24 payments, the phone falls off your bill, it's now yours. because $999.99 has been paid The customer paid $610 over 24 payments, Sprint credits the rest ($390). To make that really simple... 12 payments(12x$20)s, return the device and upgrade.you saved $260. 18 payments(18x$20), return the device and walk away. you saved $390. 24 payments (18x$20 and 6x$41.67) Phone is yours, no more payments. you saved $390.
posted on Mar 08, 2018, 8:30 PM 1
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