New York Attorney General investigating T-Mobile for false advertising

New York Attorney General investigating T-Mobile for false advertising
Is a 24-month equipment installment plan actually a two-year contract in disguise? The New York Attorney General's office will have to figure this out as it has started investigating claims that T-Mobile has been engaging in false advertising. A consumer organization called Change To Win says that 91% of T-Mobile customers are actually stuck with two-year loans, paying monthly for new phones. 

T-Mobile was the first of the major carriers to do away with subsidized handsets, which use to lock customers into a two-year service contract. The equipment installment plans used by T-Mobile to replace subsidized phones soon became available from other major carriers, with customers making monthly payments over 24 months.

According to USA Today, a letter complaining that T-Mobile uses "deceptive marketing and abusive debt collection practices" has been forwarded to the Consumer Financial Protection Bureau. The agency is responsible for the oversight of financial products for consumers. The letter complains that T-Mobile customers who stop paying before the 24-month EIP has ended, could find themselves in debt collection "with little or no notice." 


The latest fad in the industry is leasing, which T-Mobile uses for its JUMP on Demand. By offering subscribers the opportunity to lease a new phone for 18 months, operators like T-Mobile can offer customers the opportunity to use a popular handset, and upgrade it up to three times a year. Once you find a phone you want to keep, you have to pay T-Mobile the remaining balance left on the retail purchase price of the device.

We are pretty sure that outspoken T-Mobile CEO John Legere is going to be commenting on this news later today. Stay tuned.

Thanks for the tip!

source: USAToday

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24 Comments

1. BattleBrat

Posts: 1476; Member since: Oct 26, 2011

All carriers are doing the 24month installment plan!! Who are these idiots?

2. QWERTYphone

Posts: 654; Member since: Sep 22, 2014

The idiots are the ones paying full retail for these phones......especially the ones with no removable battery, SD, and are made of fragile glass.

3. Bernoulli

Posts: 4359; Member since: Sep 01, 2012

Lol bashing on Samsung this early hahaha

5. Hexa-core

Posts: 2131; Member since: Aug 11, 2015

Are you going fully retarded, Mr. QWERTYphone? Samsung's metal and glass does not #bendgate, and you call it fragile? You might as well go full and a half retarded. *SMH*

15. natypes

Posts: 1110; Member since: Feb 02, 2015

That's all he ever posts. He's just a troll ignore him. He's here to rustle your jimmies.

24. sgtdisturbed47

Posts: 966; Member since: Feb 02, 2012

I buy a phone outright once or twice per year, brand new, at retail. Sometimes it's an iPhone, sometimes Android, all depending on what suits my wants and needs at the time. Call me an idiot, that's fine. I have no device payments on top of my service cost, and no contract. That must be stupid.

8. soldier820

Posts: 115; Member since: Jan 27, 2015

I agree with you, a phone with no SD or removable battery is a phone i don't want

13. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

But this isn't what the article is about.

21. Hexa-core

Posts: 2131; Member since: Aug 11, 2015

tell them indeed!

4. engineer-1701d unregistered

rights its just like credit card payments get it now pay later or as you go you leave or dont pay you owe me simple ask the irs how it works like when they mess up you dont get your money back or on time you cant send them a late fee

6. tacarat

Posts: 854; Member since: Apr 22, 2013

Tmo will be fine. Legere is good at splitting hairs. It's how he covers his bald spot.

7. ojdidit84

Posts: 462; Member since: Jul 16, 2011

Are they... Are they really this stupid? lol If you cancel your service but still have a balance on your phone do you expect not to be charged for it? lol And when I left VZW for TMo, I guess them giving me that prepaid credit card to pay my ETF's was imaginary then...

20. tacarat

Posts: 854; Member since: Apr 22, 2013

In a word, yes. They are that stupid. They also think that if they wreck the phone, they shouldn't have to keep paying the bill since they're not using it. I'm sure it worked well with their landlord after being evicted for not paying rent.

9. torr310

Posts: 1645; Member since: Oct 27, 2011

The NY Attorney just try to find new ways to suck money.... The laws are modern society's burden.

10. JadeMoon

Posts: 145; Member since: Aug 12, 2012

This is not a contract for three reasons. 1. The customer has the option to pick installment plans or pay for the phone in full up front. 2. You can make any payment any time so you can pay the thing off faster than two years. 3. You dont have to buy a new phone every two years, you can have your phone how ever long you want or dont want. All you are responsible for is the price of the phone and sales tax.

11. ryan5609

Posts: 107; Member since: Nov 01, 2011

You can't fix stupid. While agree that it not a whole hell of a lot different than a 2 year contract. The language is still way less confusing than a standard contract with an ETF. You lease a phone (basically interest-free from T-Mo) and you can keep the phone once its paid off, in 2 years or 2 months. You're only obligated to pay for your purchase. Only stupid people find this concept hard to grasp. If you stop paying your credit card, what happens?

14. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Dude, its no different than a contarct. The difference is simple. The ETC starts at the other 50% of the phone you didnt pay when you got the device. That contact ETF gets lesser each month while on contract. The difference is, you pay more for a phone on contract. Example.. the iPhone is $649 You pay 199 upfront to sign a 2 year. The plan to cover the phone is charged at a higher cost which is basically including the cost of the phone over 24 months. Hwoever it is a rip off because if you compare VZW's plan for a line of service it is about $25 vs $40 on a contract. Which means you can easily pay off 50% of a phone in 12 months or less not 24 months. So you pay MORE for it. With T-Mobile it depends on if you are leasing a phone. You can lease a phone for 20 months if you want. I have 2 lines on this, but you can still make extra payments and pay it off sooner, MY other 2 lines I chose JUMP! But still i can pay the term over 24 or pay early. As long as I pay 50% off I can upgrade anytime I want. VZW forces you to pay monthly for 24 months, or you can pay off the Phone in full at anytime, which to me is a contract because they don't let you make extra payment. You must either do the monthly or pay it off in full. Even ATT allows for making extra payments on a monthly payment option. technically it is a 24 month lock-in, but it isn't a contract. Whether you chose a contract or not, if you want to move to a new device or to another carrier, you still have to pay for the phone

12. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

That is false. You aren't stuck unless you use the leasing plan. If you use the monthly plan, you can pay off the device sooner by making extra payments as that isn't on any contract. If you pay it off early you can trade up easier. I would say they need to look at Verizon. Verizon doesn't allow you to make extra payments towards a device on a payment plan. Effectively forcing you to stick with them 24 month. You can pay off the device early, but you must pay the full amount at once. There is nothing to investigate. Breaking the payments of a retail price into 24 payments with no financing simply makes the cost lower. But since they allow you to make extra payments you are never stuff with being forced to go the full 24 months. It's all BS because the other carriers are pissed T-Mobile is taking customers from them. It's all smoke and mirrors.

16. jsjammu

Posts: 169; Member since: Nov 13, 2014

what part of it you cancel your contract the total amount becomes due is so HARD to grasp?

17. DantheMan

Posts: 1; Member since: Dec 08, 2015

They should be investigated for false advertising their coverage map. I had better coverage with Virgin Mobile then I do with these jokers.

18. xq10xa

Posts: 808; Member since: Dec 07, 2010

What people don't get is that even with a 2 year agreement you are still paying the phone off. It's subsidized and built into the plan. You don't get an iPhone 6s for $200 because you signed a 2 year. You are still paying the phone off..it's just structured into your monthly bill. Even after the 2 year mark and you are "off" contract your phone bill remains the same. Which means you are just paying money for a phone you would have paid off in 2 years anyways.

19. xq10xa

Posts: 808; Member since: Dec 07, 2010

T-Mobile should get investigated for false advertisement. Their network is garbage. I get it...if you live in a suburb or by main cities then you are set. Anyone who travels anywhere knows the truth about T-Mobile. T-Mobile is for teens or adults who can't afford the big 2.

22. imbruiselee

Posts: 6; Member since: Mar 18, 2014

Oh, I no longer want to be associated with my car financing and I'm only 1 year in of 5 but, I want to keep my car. I should hire these guys so I don't have to pay for my car but still get to drive it.

23. jayz74

Posts: 1; Member since: Dec 08, 2015

In business, customers AND employees exist for ONE reason: PROFIT. Anyone who can't except this should move to another country. The ONLY reason all of these companies grow into large corporations is because they make a lot of money. Instead of complaining about not being able to afford something, learn how to make a lot of money and buy better quality goods and services. In regards to Verizon and At&t have made hundreds of millions for company executives , shareholders and traders in New York. Verizon SELLS Network Bandwidth to everyone else because they own most of it. When you are spending tens of billions of dollars to create something, you better make as much money as you can from it. Verizon and At&t have almost 300 million customers. When you want better service, you pay more. John Legere is focusing on the poorer customers who cannot afford or don't want to pay for better service. Those are customers that At&t and Verizon don't need anyway because they want more than their money's worth. What good is it to have a store and have customers who want you to not make a profit off of them . The ONLY reason to have a customer is to make a profit off of them. If you cannot do that then they are not a customer. T-mobile's stock price has dropped over 20 percent. If it continues down this path, someone will just buy them out if investors and traders in New York don't put them out of business first. The CEO has been warned that he BETTER do something to get money out of these customers or he is fired. Their approach is to deceive customers by making them think that T-mobile does not need to make as much money as the other companies in the same industry. This argument fails miserably because T-mobile needs to make MORE than the other to catch up! Also, because new federal laws REQUIRE benefits and health care for more workers, T-mobile has to be able to offer more money to get the best employees. The formula they are using IS bait and switch. They want to add customerss, get themm into 2 year payment agreements so they don't leave early, and then raise prices. I have worked in this industry for years AND I traded for years. These are FACTS. not my opinion. Its just like someone telling a bunch of kids that Santa Claus is coming to town IF you give me $20 and that Santa will give you $1000 worth of toys. If you stop looking for more than your money's worth, you will not get tricked by people who think that YOU are crooks for not wanting bthem to make their profit. In sum, Verizon and At&t will make a lot more profit and a lot more advances in the industry BECAUSE they make so much money and T-mobile will have to beg them to use their network or buy bandwidth from them. Without the billions of dollars invested by Verizon, the industry would be NO WHERE NEAR what it is now. Those of you who seek DISCOUNTS over QUALITY SERVICE, be prepared for years of lousy service because your service provider cannot invest

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