T-Mobile faced with a lawsuit on phone contract cancellation terms


When we compared the prepaid plans of the major carriers, and their best MVNO sidekicks, we noticed that Cricket has quietly introduced a $70 plan that offers unlimited data about ten days ago. It's pretty clear whose offering Cricket targets with that one, as the virtual operator even used the word "uncool" in its press release, saying that T-Mobile will charge you $25 more for the same thing - that's how shaken the big boys are (Cricket is owned by AT&T) by the "Un-carrier" plans.

Well, T-Mobile also offers unlimited Netflix, Hulu, music and other streaming that wouldn't count against your high-speed data allotment, as well as easy ways to pay for the hottest phones in installments, and even upgrade them on a regular basis without much hassle or expenses. These phone payments, however, are the target of a lawsuit filed by T-Mobile customer Moshe Farhi, who claims that he had been misled by the no-contract advertising.

The gist of the story is that he bought four handsets for $2600 in total for him and his family, and T-Mobile took service of the loan that allowed him to pay the phones on monthly installments. In three months, however, when he decided to terminate the service, T-Mobile said he would now own the remaining $2270 on his phones, due immediately. The lawsuit claims that T-Mobile never made clear to Farhi that he wouldn't continue the 24 monthly payments for the phones, but has to pay the remainder outright. 

T-Mobile, of course, says that it's in the contract, and, looking at the way each and every carrier operates after the death of two-year contracts, the "Uncarrier" has a point. Mr Farhi is now trying to turn this into a class-action lawsuit against false advertising, but something tells us he wouldn't go very far with that - there's little incentive for T-Mobile to give away what is essentially a no-interest loan on expensive phones, if you aren't using the carrier's services, after all. What do you think?

source: Quartz

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33 Comments

1. zunaidahmed

Posts: 1183; Member since: Dec 24, 2011

This is stupid, we all know phone installment plans are bonded with the network plan. This is same for all the carriers. When the f**k has he been living for the past 20 years? Guess people just love suing, and I am pretty sure he is not gonna get anything out of it, and he would have to pay his lawyer I suppose. Judging from the price, it's 650 USD each, so an iPhone? Could be LG G5? But what so ever, doesn't matter, just a stupid dude doing something stupid, it's pretty common in America. Last time I saw a news about car thieves being chased by the cops, they stop, take selfies, post them on Instagram and then go to jail, WTF is wrong with people these days?

10. GoGoGalaxyNexus

Posts: 80; Member since: Nov 01, 2013

This is the US, the land of the lawsuits and the whopper

22. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Stupid people live in all country's, its just we allow them to waste our courts time and money.

23. GoGoGalaxyNexus

Posts: 80; Member since: Nov 01, 2013

the worst part is that they are going to get away with it because it'll be more expensive for T-Mobile to fight this in a court room

25. nnjerzy

Posts: 126; Member since: Jun 19, 2013

I totally agree what a idiot. If you terminate by your doing regardless of what the reasoning is you are obligated to pay, How can you can for something in payments when its bound to your account.. smfh

31. TmoRep

Posts: 107; Member since: Apr 20, 2016

People need to read the contracts we send them instead of just clicking adopt and sign. I always advice my customers to do so. TERMS and CONDITIONS triumph!

2. Babert

Posts: 165; Member since: May 08, 2013

I honestly don't know what to say, it's stupid to sue the only company that singlehandedly turned the cellphone industry back to customers! shame on these people, shame on them for trying make an indecent money! go on TMO we are with you!

3. davidsmith

Posts: 62; Member since: Mar 09, 2016

Why returning devices and no paying remaining balance is not an option? Because Tmobile didn't eliminated contract,

5. elitewolverine

Posts: 5192; Member since: Oct 28, 2013

Because then they have to send the devices back to mf for refurbishing, then maybe resell them. Which his over 100$ per phone. Now if we started to charge customers the process fee instead of the remainder phone fee would he be happy?

8. Babert

Posts: 165; Member since: May 08, 2013

Because you have been using the device for some time and there is a thing called item value deprecation and the phone is no longer brand new. plus it would allow some people to abuse the contract! cough mr. farhi. also you liked the phone so you took it right? then pay it off and use another carriers sim! I already am in another country and TMO sim unlocked my Galaxy S6 without paying it off and although I suspended my line for free they only deduct the small amount of installment plan! and they didn't want me to pay the full price! now that's a company to stick with! I used to be with AT&T and I know the pain of 2 year contract and overcharges! well NOT ANYMORE! I hope you get your answer my friend.

4. johnbftl

Posts: 283; Member since: Jun 09, 2012

I understand the deceptive advertising portion. As far as I know though, all four major carriers have an arbitration clause in their agreements. I could be wrong. It's been a long time since I've sold T-Mobile (2010). I worked for AT&T from 20111 - 2013, Sprint for a year after that, and now that I'm at Staples we sell Verizon. All three of those have an arbitration clause, meaning any financial disputes regarding the account have to be mediated by an arbitrator, not by lawsuit.

6. elitewolverine

Posts: 5192; Member since: Oct 28, 2013

I believe class action is different since at that point it is considered beyond simple upset customer suing.

11. VZWuser76

Posts: 4974; Member since: Mar 04, 2010

http://www.phonearena.com/news/The-U.S.-Supreme-Court-enforces-carriers-arbitration-clauses_id18485 The point of those arbitration clauses was to prevent class action suits.

17. elitewolverine

Posts: 5192; Member since: Oct 28, 2013

ty, totally missed that article

7. tomn1ce

Posts: 247; Member since: Mar 12, 2012

Where the hell has this guy been living? He expect to terminate his contract and continue making monthly payments for each device. I take it he didn't read the contract or listen to the rep, if the rep told him that if he cancels the contract the remaining balance of the cell phone is due at time of termination. If that wouldn't be the case people would be doing this all over the place. Get phones on installment plans in one company and take that same device and go to another company. What a dumb @$$......

26. nnjerzy

Posts: 126; Member since: Jun 19, 2013

lol u right what a dumb royal @ss

29. Shauk

Posts: 33; Member since: Mar 29, 2016

to be fair we just email the service agreement & TOS to them now if they place the order thru telesales but we still get their recorded permission to place the order after we get their spoken agreement to the arbitration clause as well as their stated agreement to read said terms and conditions that we sent to them.

9. GreatBigPhoney

Posts: 70; Member since: Jan 27, 2015

I understood that the device payment remainder would be due as soon as you cancel from the beginning as I verified before starting service but have also been told by reps each time I upgraded. Maybe this guy wasn't informed but I still think it is nonsense. He probably just wanted to buy the phones with 24 monthly payments andsigned up for the service to do that thinking he could just continue financing the devices even if he went to another carrier. When he found out he wasn't going to have it that way, he probably just got pissed off, but I don't think he's entitled to anything. T-Mobile nor any other carrier is in the business of financing phones to non-customers, it doesn't make sense. I don't think people should be allowed to plead ignorance either. If you're entering an agreement to pay a company a fairly large amount of money, it is your responsibility to understand the rules and limitations.

15. sissy246

Posts: 7111; Member since: Mar 04, 2015

He may not had been informed. I am not dumb and I know if I was to cancel my phone service I would have to pay my phone off, only common sense. But I got 2 of are phones at at&t and one from best buy and no one ever told me if I was to cancel I would have to pay the phones off, so no the employees don't always inform someone. But it is also common sense to read your contact.

12. ShadowHammer

Posts: 204; Member since: Mar 13, 2015

T-Mobile may have been a little shady in the way they described how Binge On worked, but I don't recall them being unclear regarding payment plans. Everything I have seen seems pretty straightforward that you are required to pay the remaining balance right then if you cancel your service. Sounds like the guy is just trying to weasel out of it. Guess we'll see when more details come forward.

13. bubblechaos

Posts: 114; Member since: May 04, 2015

This guy, trying to make t-mobile look like a bad guy. Worse case scenario for t-mobile is, well you can have the 24 month installment without on our network. You still have to pay your lawyer and waste your time coming to court. dumb ass...

14. downphoenix

Posts: 3165; Member since: Jun 19, 2010

Maybe as a way to alleviate financial concerns, they could make it to where you are still doing payments on the device, but just have it set to an interest rate similar to a credit card.

16. jroc74

Posts: 6023; Member since: Dec 30, 2010

Gotta know what you are signing up for, signing your name to, etc. Like I bet many dont know when your carriers makes a change to your plan, if you feel you cant deal with it you can get out your contract penalty free. But you have to act as soon as the plan change goes into effect or right before. Dont know if there is a deadline after it goes into effect. I think thats why companies give notice about plan changes before they happen. Unless that's changed....and I hope it hasnt.

18. elitewolverine

Posts: 5192; Member since: Oct 28, 2013

I think for TMO its 14 days or the next billing cycle which ever is longer. So that the customer has a time to see their changes.

19. 1ofdakoolkidz

Posts: 23; Member since: Jul 30, 2012

Um..dumbass you could do exactly what you wanted, if you just purchased it using a credit card. To expect to keep paying for your device and keep it after cancelling service is ridiculous, he probably found this out trying to get the devices unlocked. Old saying...the only stupid questions are the ones unasked. C'mon dude!

20. JadeMoon

Posts: 145; Member since: Aug 12, 2012

Whoever filed this lawsuit is an idiot. Every time I purchase a phone on EIP its very clearly disclosed in the agreement that you owe the phone balance if services are terminated.

21. joevsyou

Posts: 1091; Member since: Feb 28, 2015

it's a loan... not a rent service, not hard to understand

24. bikrame

Posts: 43; Member since: Aug 13, 2015

Stupidity level too high to measure. Tmo should sue him back.

27. JunitoNH

Posts: 1946; Member since: Feb 15, 2012

First clue he is a jackass, $2600 for phones. Dude, save the money for your kids college, or a rainy day.

28. Shauk

Posts: 33; Member since: Mar 29, 2016

Dude's gonna lose his ass hard. You can't even get service or contracts without signing on the dotted line and while no, Tmobile doesn't do contracts on the actual phone service itself, it's stated quite clearly that if you wish to enter into the equipment installment program, you may contract your service at any time with the caveat that if you plan on taking your phones elsewhere, you pay for the phones. ITS THE SAME WITH ANY FINANCIAL AGREEMENT ANYWHERE. If you want to PURCHASE something then you PAY for it. how hard is that to understand?

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