Washington AG Slams T-Mobile Over Deceptive 'No-Contract' Ads

zacharye writes "Washington State Attorney General Bob Ferguson on Thursday ordered UNcarrier T-Mobile to correct 'deceptive advertising that promised consumers no annual contracts while carrying hidden charges for early termination of phone plans.' T-Mobile, which recently did away with standard cell phone service contracts and typical smartphone subsidies, is accused of misleading consumers by advertising no-contract wireless plans despite requiring that customers sign an agreement that makes them responsible for the full cost of their handsets should they cancel service prematurely ..."

Comments

exactly the same as Blockbuster

[slashmydots]

This is absolutely identical to Blockbuster's "no late fees...well unless you don't bring it back for over a week, then one giant one" problem. In that case though, I think 47 or so states sued them.

Re:exactly the same as Blockbuster

[geekoid]

No, it's not. The advertise no contract; which the provide. If you don't want to pay for the phone up front, you can pay for it over time. Obviously if you leave before you are done paying for it, they want the rest of the money you own them for the phone.

Re:exactly the same as Blockbuster

[bluefoxlucid]

Actually, this is no contract service. The contract is for a subsidized phone. Unlike, say, Verizon, where you might pay $128 for breaking your contract--ever. Didn't get a subsidized phone? LOL cancellation fee.

I suspect T-Mobile is financing your phone, and rolling it into the bill. Haven't looked, as I don't have a contract.

Re:exactly the same as Blockbuster

[geminidomino]

And how, exactly, is that not a standard cell service contract?

Re:exactly the same as Blockbuster

[mypalmike]

And how, exactly, is that not a standard cell service contract?

With a standard cell contract, your recurring charges stay the same indefinitely. You are billed as if your phone is subsidized even if it is not.

Re:exactly the same as Blockbuster

[TooMuchToDo]

It's a loan, not a cell service contract.

You can cancel your service anytime, just pay up the rest of the principal on the 0% interest loan they're giving you.

Re:exactly the same as Blockbuster

[rudy_wayne]

After reading the article, I see nothing deceptive. They sell you a phone on a monthly payment plan. You can cancel your service with them at any time but you still owe them for the phone that you bought. That's just basic common sense.

Once again a business is being hassled just because their customers are dishonest and/or stupid.

Re:exactly the same as Blockbuster

[narcc]

As much as I hate to say it, geekoid is right. It's more like a loan. You're responsible for the total cost of the phone, which they let you pay over time, but that's not tied to a service agreement the same way a normal contract plan is. You pay a bit extra every month until the phone is paid-off -- if you terminate service, then the full amount remaining come due.

Re:exactly the same as Blockbuster

[Anonymous Coward]

Because you can terminate your cell phone service at anytime, with no penalty. Also, once you finish paying for the phone, your bill is reduced.

Example, I have a $65/month plan, and I have a S3 that I'm paying off at @20/mo.

Right now I pay $65+$20/mo. Once the phone is fully paid for, I'll only pay $65/mo (+ all tax/etc. of course). If I cancel my service before I finish paying off the phone, I still have to pay off the phone.

No even remotely the same as a standard cell service contract.

Re:exactly the same as Blockbuster

[admdrew]

I suspect T-Mobile is financing your phone, and rolling it into the bill.

I haven't done this yet, but I did get as far as "checking out" online to see what it was like, and they pretty clearly display the $20 per month phone charge, as well as the initially-owed amount (ie, $99 for an HTC One). Online purchasing also gives you the option of paying for it entirely up front.

Re:exactly the same as Blockbuster

[AvitarX]

1) your monthly payment varies based on the cost of your phone
2) it drops after 20 months (the time they let you spread the payments over, appears to be 24 months now)
3) your "penalty" is based on the price left on your phone, not arbitrary

I think if they are not advertising phones at discounted rates it's all clean, you can, and they will even encourage you to if you want low rates, buy a phone outright and not have any penalty. A galaxy S refurb is under $200, they had some even cheaper phones (some little, but usable huawei phone) at the store last I was there, this was a while ago, but $99 outright.

Re:exactly the same as Blockbuster

[Anonymous Coward]

Isn't a loan with agreed upon conditions a type of contract?

Re:exactly the same as Blockbuster

[ElementOfDestruction]

Who modded this "Insightful?"

Re:exactly the same as Blockbuster

[poetmatt]

you can't enforce a termination fee without a contract enforcing it.

Re:exactly the same as Blockbuster

[Anonymous Coward]

Maybe you're on your first phone contract or have simply never owned a phone out of contract, but I can say for absolute fact that you do not get any special treatment for owning your phone outright. The cost of the plan is a fixed amount, subsidized or not. If you bring your own phone you are only aiding the carrier hedge their bets by paying the same monthly rate as a contracted user but posing zero repayment risk.

If you call and ask nice you can probably get in on an employee pricing plan for your company. Discounts of 20% or more are not uncommon and if you don't have one you're just subsidizing those that do, often times the very same people you're already subsidizing, the contract renewers.

Re:exactly the same as Blockbuster

[bluefoxlucid]

Credit card? You got it!

Re:exactly the same as Blockbuster

[TsuruchiBrian]

It is a contract. It is a contract to pay for the phone over the course of 2 years. The thing that T-Mobile has done is separated the service contract from the phone. You can have a monthly service plan (contract free). You can buy a phone from them, or bring your own phone that you purchased elsewhere. You also have the option of receiving a phone and a loan from them if you sign a contract to pay it back over 2 years.

You can cancel your service any time without a termination fee. You are not able to get out of your agreement to pay for the phone they gave you.

This is orders of magnitude better than what other carriers do. They force you to pay for a new phone with a 2 year service plan whether you get one or not. So everyone gets their "free phone" (that they are already obligated to pay for), and they are also stuck with the same service provider for the next 2 years.

At least with T-mobile you can switch to another carrier. You can even sell your phone on ebay to try to recoup some of the costs if you don't want it anymore.

Re:exactly the same as Blockbuster

[dgatwood]

What I don't get is why T-Mobile doesn't let you continue paying off the phone on a month-by-month basis after you cancel service. That's the part that's potentially deceptive. One would naturally expect that "no contract service" means that your loan on the phone is not tied to that nonexistent contract. The fact that your phone loan is tied to service means that, in fact, it is a service contract, no matter how T-Mobile tries to spin it.

Re:exactly the same as Blockbuster

[Pentium100]

It's deceptive because that was not mentioned in the ad. I mean they could advertize the no-contract service (without phone) and it would be true. They could advertize the payment plan for the phone and it would be true. But when you add no-contract service and payment plan for the phone and call the result "no-contract service" that's no longer true.

And this is a big business, not some small company that cannot hire ad designers (where you could say that this was an honest mistake) - a team of specialists in advertizing came up with this, so I'm sure that is was intended to mislead people into not understanding that the payment plan for the phone is not part of the "no-contract service" even if the phone is mentioned in the same as as the service.

Re:exactly the same as Blockbuster

[Anonymous Coward]

yes, but not a plan contract....

Re:exactly the same as Blockbuster

[recoiledsnake]

Under the standard cell service contract, they continue charging the higher monthly rate even after the contract expires.

On TMobile, once your device is paid off, the monthly fee is reduced by the amount you were paying for the phone.

Re:exactly the same as Blockbuster

[MightyYar]

Your cost per month goes down once the phone is paid off. Alternately, you can buy (or bring) your phone and pay less each month. No other US carrier offers this unless you go prepay.

Re:exactly the same as Blockbuster

[todrules]

Maybe you're on your first phone contract or have simply never owned a phone out of contract, but I can say for absolute fact that you do not get any special treatment for owning your phone outright. The cost of the plan is a fixed amount, subsidized or not. If you bring your own phone you are only aiding the carrier hedge their bets by paying the same monthly rate as a contracted user but posing zero repayment risk.

That's true with Verizon, AT&T, and Sprint. But not T-Mobile. As soon as you pay for the phone, you're monthly bill goes down. Also, if you bring your own device, you get that dropped rate immediately.

Re:exactly the same as Blockbuster

[Opportunist]

The deceptive part is where the phone suddenly is due the moment you cancel your "non-contract" with them. It would be ok if they informed the customer explicitly that this is the case. It would be ok if they kept the monthly plan going until the phone is paid.

The deceptive part is where they can force people who cannot afford paying off their phone instantly into staying with them because they can't afford getting out.

Re:exactly the same as Blockbuster

[vux984]

you can't enforce a termination fee without a contract enforcing it.

There is no contract for the phone service.

There is still contract if you take out a loan on a new phone that just covers that loan. If you want to exit the service early, you have to pay off the principle.

Is it 'misleading'? A little bit, yes, because they say its no contract, but if you want to pay for your phone over a 2 year period well then you still need a contract for THAT.

I think this is definitely a good direction for the industry to go, and its unfortunate that they are getting slapped a bit for it, but they do need to be clear that the service has no contract, but the purchase of a subsidized phone is essentially a separate loan agreement for that phone, and that you do have to sign a contract to take out that loan.

Re:exactly the same as Blockbuster

[DRAGONWEEZEL]

I did a comparison, and I think they're fleecing everyone...(who buys in)

While there is a diffference between them / Verizon for "unllimiited' accounts. (comparing to sharing 8-10GB, or my grandfathered unlimited plan.) and it's about $20 or so,

They're not really 20$ cheaper w/o the phones, as their model prior model was. if they were, that would rock I'd buy in right now.

Re:exactly the same as Blockbuster

[DRAGONWEEZEL]

(as with their prior pricing model. sorry)

Re:exactly the same as Blockbuster

[Anonymous Coward]

It's because they don't want to deal with stand-alone micro-loans. Anytime you take on a debt, you enter a contract. What t-mobile is advertising is no contract for service. agree with rudy_wayne.

Re:exactly the same as Blockbuster

[phobos512]

They force you to pay for a new phone with a 2 year service plan whether you get one or not. So everyone gets their "free phone" (that they are already obligated to pay for), and they are also stuck with the same service provider for the next 2 years.

At least with T-mobile you can switch to another carrier. You can even sell your phone on ebay to try to recoup some of the costs if you don't want it anymore.

You do realize that you can buy unlocked GSM phones, purchase a SIM card from AT&T (and formerly T-Mobile) and use it without having to pay several hundred dollars up-front right? I've done that many times over the years. Ditto for purchasing a used or new CDMA device. You just call up the carrier and say you want to activate a device. You don't have to "pay for a new phone with a 2 year service plan whether you get one or not" as you say...

Re:exactly the same as Blockbuster

[Andy Dodd]

More importantly: If you bring your own phone, or pay for your device outright, you have no contract.

Prior to T-Mobile's offering of no-contract plans - if you paid for your phone outright, or brought your own phone - you STILL had to sign up for a contract.

Re:exactly the same as Blockbuster

[mypalmike]

I'm not sure why you think you're correcting me - you said the same thing I did.

Me: "You are billed as if your phone is subsidized even if it is not."
You: "The cost of the plan is a fixed amount, subsidized or not."

Re:exactly the same as Blockbuster

[slashmydots]

You are, however, literally signing a contract though so it's not "no contract"

Re:exactly the same as Blockbuster

[slashmydots]

That makes sense because they are seriously handing money over to the phone manufacturer to subsidize the phone. It's not some theoretical thing.

Re:exactly the same as Blockbuster

[MondoGordo]

Are you being deliberately dim? You are paying for a new phone whether you get one or not because the plans offered cost the same whether or not you bring your own device. I can attest from personal experience with Sprint ... even if you bring your own device they still won't give you a new line without a 2 year service contract that costs exactly the same as it does if you get one of their "free" or "low cost" phones..

Re:exactly the same as Blockbuster

[poetmatt]

I agree with you, 100%. It's still a positive step forward but "if you get a phone via loan that will require a contract" is really all they have to say to make things less confusing.

Re:exactly the same as Blockbuster

[rudy_wayne]

The deceptive part is where the phone suddenly is due the moment you cancel your "non-contract" with them. It would be ok if they informed the customer explicitly that this is the case.

They advertise no contract cell service and that's what you get. When you sign up with them and agree to buy a phone from them, then at that point you learn that if you cancel your service before you finish paying for the phone that you bought from them., you owe them the balance. T-Mobile may not explicitly put that in their ads -- nobody puts every little detail in their ads -- but I would find it hard to believe that they NEVER disclose this at any point when you sign up with them.

The deceptive part is where they can force people who cannot afford paying off their phone instantly into staying with them because they can't afford getting out.

If you "can't afford" then just maybe you shouldn't be buying a $580 phone.

Re:exactly the same as Blockbuster

[ArhcAngel]

You can even sell your phone on ebay to try to recoup some of the costs if you don't want it anymore.

And for the tl;dr set T-Mobile will even buy the phone back and credit that to what you owe.

Re:exactly the same as Blockbuster

[dgatwood]

That's what they're advertising, but that's not what they're delivering. As long as the loan contract is dependent on continuing service, the service is contractually bound, period.

Re:exactly the same as Blockbuster

[mspohr]

Because this is a contract to buy a phone, not cell service.
Same as buying a washing machine at Sears on time payments.
Sears wants their money regardless of whether or not you are using the machine.
If you can't come up with money to buy a real smartphone up front, perhaps you should stick with a $10 Tracfone.

Re:exactly the same as Blockbuster

[dgatwood]

This is like a car service contract where when you decide you want to get your oil changes from someone else, you have to pay off your car loan. That's a substantially nonstandard contract term that requires more than just incidental mention in some terms and conditions.

Re:exactly the same as Blockbuster

[Marxist Hacker 42]

That's what T-Mobile recently changed. You are now charged only $20/month for 24 months for the phone. If it is still useful to you after that- the $20/month goes away.

Re:exactly the same as Blockbuster

[Anonymous Coward]

What I don't get is why T-Mobile doesn't let you continue paying off the phone on a month-by-month basis after you cancel service. That's the part that's potentially deceptive. One would naturally expect that "no contract service" means that your loan on the phone is not tied to that nonexistent contract. The fact that your phone loan is tied to service means that, in fact, it is a service contract, no matter how T-Mobile tries to spin it.

Obviously because if you leave them they no longer have any incentive to give you a zero interest loan, which is what they are doing. You can get an iPhone 5 from T-mobile under their new scheme than you can buying it directly from Apple.

Re:exactly the same as Blockbuster

[h4rr4r]

This.

It is a loan, cancel service and the loan comes due.

What they should do is let you cancel service and still finance out the phone. That way there is no room for anyone to complain.

Re:exactly the same as Blockbuster

[anagama]

No even remotely the same as a standard cell service contract.

I agree. A couple years ago I decided to upgrade my phone (I was already a T-Mobile customer). After looking at the difference between subsidized plans to paying for a phone outright and getting a month-to-month plan, I decided I'd buy the phone. Anyway, when I told the guy what I wanted to do, he said fine, but also, if I wanted to, I could finance the phone at 0% interest for 20 months and have the MTM plan. That was a no brainer so I took that deal instead of laying out the cash.

It was quite obvious the phone and the plan were separate things. And that's what T-Mobile is still doing. It doesn't seem deceptive at all -- rather, in the spirit of "no good deed goes unpunished" -- they're getting criticized for offering a zero or low percentage interest installment plan. If people don't want to be beholden for the remaining balance, they can just put it on a Visa and pay somewhere between 10 and 5billion percent interest. No matter how you pay for the phone, the plan is still the same MTM plan.

Last point, if you buy a phone with decent specs and build quality, it's going to outlast the repayment term. When I bought my last phone, I got an HTC Amaze -- the speed and quality is such that even after a couple years, I have no desire to replace it. It's worth it to spend money on a good phone.

Re:exactly the same as Blockbuster

[Anonymous Coward]

If you bring your own device to AT&T, you're getting ripped off because you're paying the same monthly service price as the buy who is subsidizing his phone purchase.

AT&T charges you $X/month regardless of whether you BYOP, your under a 2 year agreement, or you're passed the 2 year agreement.

T-Mobile's plan separates the cost of the plan and the cost of the phone -- separate line items on your bill. If you BYOP or buy your phone outright from T-Mobile you get charged just the service fee. If you buy a phone on a monthly installment plan from them, you pay service fee + the monthly fee from the installment plan, but only until the phone is paid off (and you can pay the phone off early if you want).

The AG in this story should be going after the industry standard practice of ripping people off who own their phone outright, not T-Mobiles fair and honest dealings.

Re:exactly the same as Blockbuster

[Anonymous Coward]

Americans are really that stupid?

Follow the money here - bet it ends with a cheque from AT&T to ( the idiot ) Washington State Attorney General Bob Ferguson. Of course its all legal. The American legal system is all about rules and letter of the law, not intent or outcome.

Re:exactly the same as Blockbuster

[Anonymous Coward]

If I am a new subscriber looking for 2 lines of service and a "normal" amount of data my options are:

VZW: Share Everything Plan + 4GB of shared Data = $150 /month + the contract price of the phones

Tmobile : Simple Choice Plan + 2.5GB of Data per line = $100 /month + the full price of the phones

ATT: Mobile Share Plan + 4GB of shared Data = $150 /month + the contract price of the phones

If you choose to finance both phones with T-mobile that would add $40 / month to you bill for 24 months making the savings be ether $50/month or $10/month which over 24 months is a savings of $1200 or $240 hardly fleecing IMO. especially if you look at a nexus4 from google play.

Re:exactly the same as Blockbuster

[h4rr4r]

They sort of do advertise a low upfront price. The GS3 on their website says $149, or did last I looked, in the fine print it said + $20/month for X months.

Advertising the real price and mentioning it can be financed is not done because people will only see the large upfront price and be put off.

Personally if you cannot afford to drop $350-$700 on a phone, then you can't afford a smartphone contract either.

Re:exactly the same as Blockbuster

[Dragonslicer]

Prior to T-Mobile's offering of no-contract plans - if you paid for your phone outright, or brought your own phone - you STILL had to sign up for a contract.

That's true, though it isn't the recent no-contract offering that started it. T-Mobile has been doing it for several years now. My plan has been $20/month cheaper than it otherwise would be ever since I brought my N900 to them three years ago.

Re:exactly the same as Blockbuster

[Swarley]

This is nonsense. Try doing exactly what you said with Verizon. They won't let arbitrary compatible devices on their network. Call them up to activate and they'll tell you to bring the device to a Verizon store so they can "assess it for compatibility" which just means figure out if you bought it from them or not. If not it magically becomes "incompatible".

Re:exactly the same as Blockbuster

[Anonymous Coward]

You have the option of continuing the financing for the phone, they said that much. It doesn't magically become due in full the way an ETF does.

Re:exactly the same as Blockbuster

[anagama]

It costs tMobile money to make no interest loans. For example, they pay hundreds wholesale for a device right now. Then they get that back in dribs and drabs over two years, each payment worth slightly less due to inflation -- if they sold the phones at cost, they would lose money over time for certain. I'm sure there is markup though, so at some point, this turns around and they make a little money on the phone itself.

That said, imagine how screwed tMobile would be if millions of people go in, sign up for one month, walk out with a $600 retail ($500? wholesale) phone, and then cancel the next month. Even if half the service fee was profit, they'd be out $475 or so each time that happened -- it would a recipe for bankruptcy.

Re:exactly the same as Blockbuster

[Opportunist]

From TFA:

The Attorney General’s office confirmed that T-Mobile [...] will no longer fail to ”disclose that customers who terminate their T-Mobile wireless service before their device is paid off will have to pay the balance due on the phone at the time of cancellation.”

The problem is not that they could not afford a phone for 600 spread out over two years at comfortable payments of 50. They can't afford to pay those 600 now, which would exactly be the case, though, if they went and left TM as their carrier. And if this is not pointed out explicitly, it is reasonable for the customer to assume that his two years, 50 bucks a month contract keeps running. Instead he is now facing the problem that he can either stay with TM as the carrier or find some way to cough up the rest of what he owes for the phone now.

That's indirectly forcing people into staying with them. It's like your car dealer offering you a plan where you can pay your car over the next 2 years and offers you some oil changing service at the same time. If you take the oil service package but later change your mind, the rest of what you owe for the car is instantly due. Well? Gonna have your oil changed there or can you pony up the dough necessary to move to a different garage?

Re:exactly the same as Blockbuster

[Opportunist]

The problem is not that you still have to pay off your loan, the problem is that it is due in full the moment you decide to go to a different garage.

Re:exactly the same as Blockbuster

[geekoid]

once a gain? no, this is the exception. Big business usually deserves what it gets.

Re:exactly the same as Blockbuster

[Anonymous Coward]

> No, it's not. The advertise no contract; which the provide. If you don't want to pay for the phone up front

I hate to be pedantic... but even paying for the phone 100% up front is still a contract.

Offer
Acceptance
Consideration

You keep the phone. They keep the money. That's a contract per the legal definition.

Re:exactly the same as Blockbuster

[geekoid]

Can you not think of complex things? can you count past 3?

T-Mobile offers a no contract. They ALSO offer other things. So yes, you can get service without a contract. OR you can get it with a contract; whichever works for you.

Re:exactly the same as Blockbuster

[Opportunist]

Actually, it's more deceptive than that.

Who buys phones in installments? I mean, let's be honest here, 500 bucks isn't something that's gonna break my bank, it's about the amount I pull out of the ATM 'cause I'm lazy like that and don't want to go there every other day. But there are people where 500 bucks is their monthly budget. I guess we can assume that people who finance a cellphone ain't going to be found among the infamous 1%.

Now what's our not-quite-1% person going to think? Probably "Can't afford 500 bucks, but 30 a month, that's within my range..." and he gets a phone. One of those that don't come with a mandatory "stay with us or pay an early separation fee" contract.

Later that year he finds that there's another carrier offering him better rates. And he's got that sweet deal where he can walk away any time he likes and not be charged with any "cancellation fee". So he tries to cancel his "non-contract" with TM, only to find out that yes, he can walk away right now... if he pays the rest of what he owes for the phone.

Right

Now

Of course, Mr-not-quite-1% can't really afford that, that's likely still a few hundred bucks. So he is forced to stay with them.

He can't afford to get out.

Re:exactly the same as Blockbuster

[Obfuscant]

It costs tMobile money to make no interest loans.

That's not the reason. The reason is simple: if you cancel service there is no longer any reasonable collateral for the loan on the phone. It is not reasonable for them to have to send someone out to your home to repossess a cell phone. It is very simple for them to turn your service off until you pay your loan. That will be enough stick for most people.

If you've already turned your service off, they have no stick to enforce the loan.

As for this being a contract, it is NOT an annual contract, it is not a contract for phone service. It is a LOAN contract, which you can either accept or not when you get service. You don't have to keep the phone service, and there is no early termination fee for cancelling. YOU have agreed to pay off the phone loan if you cancel your phone service, but you don't have to take a loan to start with, and it seems quite logical and common sense that if you get a phone from someone that you have to pay them for it.

Re:exactly the same as Blockbuster

[Obfuscant]

They can't afford to pay those 600 now, which would exactly be the case, though, if they went and left TM as their carrier. And if this is not pointed out explicitly, it is reasonable for the customer to assume that his two years, 50 bucks a month contract keeps running.

If you cancel your service with T-Mobile and go to another carrier, why would any sane person think that the "50 bucks a month contract" would keep running? In fact, most people scream bloody murder if they cancel a service and find out that the "contract" they thought they cancelled kept running.

That's indirectly forcing people into staying with them.

That's directly forcing people to pay off a loan that they agreed to pay off for a product they have been provided. Gosh, how awful. Don't want a balloon payment in a loan? Don't take the loan. Surprised by a balloon payment in a loan? Read the loan contract before you sign. Simple words to live by.

Re:exactly the same as Blockbuster

[dgatwood]

Yes, that's generally what "paying off" means in the context of a loan—paying the remaining balance all at once. Making regular payments is "paying down" the loan, at least until the final payment.

Re:exactly the same as Blockbuster

[CanHasDIY]

No, it's not. The advertise no contract; which the provide

Do they make customer sign a document that is a legally binding agreement? Yes? Then it's a contract.

IANAL, but I can see the forest for the damn trees.

Re:exactly the same as Blockbuster

[Jah-Wren Ryel]

Same as buying a washing machine at Sears on time payments.
Sears wants their money regardless of whether or not you are using the machine.

Sears does not require you to immediately pay off the entire loan on your washing machine if you decide to stop washing clothes with it.

Re:exactly the same as Blockbuster

[CanHasDIY]

yes, but not a plan contract....

Does T-Mobile make that distinction plainly in their advertisements?

If not, then it's deceptive. Period.

Re:exactly the same as Blockbuster

[TooMuchToDo]

Sort of. To get the value plan I had before the no-contract push, I had to sign a two year contract even though I brought my own Galaxy Nexus devices to my family plan. I've "switched" to the no-contract plans to get the cheaper rate, but still have a year on my contract *even though I brought my own devices and incurred no expense device-wise with T-mobile*.

Re:exactly the same as Blockbuster

[TooMuchToDo]

Disregard the sort of part.

Re:exactly the same as Blockbuster

[msauve]

Verizon always used to be very open to what they allowed on their network - you simply had to call them to get an ESN change on the account. I used a few phones which were originally made for Sprint that way. That only changed when the FCC rules requiring GPS support in phones happened - to guarantee compliance and avoid large fines, they stopped allowing just any old phone.

Do you have some direct evidence that they're looking for phones they originally sold, or simply looking to make sure they're legal to put on the network? They might also have a legitimate concern that they're able push PRL updates, and that it supports the appropriate bands, so they're not paying roaming fees beyond what they would on a phone they sell.

Re:exactly the same as Blockbuster

[Opportunist]

Interesting, I didn't know that finer point of the English language. I always though "paying off" a loan was supposedly meaning that you still have a few installments left.

The point is, though, that people who enter that contract for 24 installments on a phone are reasonably expecting that this won't change just because they cancel their "other" contract.

Re:exactly the same as Blockbuster

[anagama]

Well, I guess we agree. though it sounds like you are disagreeing.

Re:exactly the same as Blockbuster

[Catskul]

Using the word "period" at the end of your sentence is asinine, aggressive, and adds nothing to your assertion. Period.

Re:exactly the same as Blockbuster

[Swarley]

Direct evidence is easily found on Google. Look up how to activate a non-Verizon phone on Verizon's network. You can't is the answer because they won't do it. I know they used to in the past, but not in many years.

Re:exactly the same as Blockbuster

[KGIII]

I can't answer to that but I can tell you that US Cellular (small, regional but nationwide I guess these days - or so they claim on their commercials) was my company for a long time. They will not, and have directly told me is a matter of policy, activate any phone on their network that doesn't have "US Cellular" written on it. My phone pre-dated them printing that on their phones. That is how I know and why I was told. As I said, I can't speak to the choices of other carriers.

Re:exactly the same as Blockbuster

[jxander]

Essentially, they've separated the contract for service and for hardware.

If you want to pay $600+ up front for the newest handset, then you are free and clear of any contracts. But if you want the same phone for $200, they'll finance the other $450. Cutting out of that early is exactly the same as cutting out of your car loan early, just on a smaller scale.

Re:exactly the same as Blockbuster

[Opportunist]

Yes, but still, advertising something as non-binding and no balloon payment is deceptive when you're facing one of them actually. Either you 'voluntarily' bind yourself to TM or you'll have to cough up all the dough you still owe for the phone.

I guess TM also counts on people being used to contracts where you finance the phone by being tied to the contract, where you get the phone "for free" (it's advertised as such), and when you're exploiting people's expectations, well, you should be in politics, not economy.

Re:exactly the same as Blockbuster

[modecx]

I just read through it, and T-Mobile's deal is basically a 0% APR loan with a down payment and fixed $20/month payment, on top of your monthly service charge, for however long it takes to pay off the principal (depends on the price of the phone).

Any competent lender is going to provide you with a contract which spells out what happens when the loan ends, what happens if one or both parties terminate early, etc, and in T-Mobile's case, the loan is contingent on maintaining carrier service, and the remedy is full payment of the balance. Otherwise, people will just quit and get a $600 phone for the price of a $99 down payment.

Similarly, most new auto loans may be contingent on maintaining a service of some sort, like full coverage insurance. I think Washington State's AG has his head firmly implanted betwixt his butt cheeks, since any non-retard should easily tell the difference between the pay up front no-contract, month to month deal, and the other one which includes all kinds of disclosures as to the fact they're agreeing to a loan... But whatever.

Re:exactly the same as Blockbuster

[mspohr]

Many consumer product installment payment contracts have similar accelerated payment clauses which can be triggered by loss or damage to the product, changes in borrowers financial status (miss a payment and it all comes due, for example), etc.
This is a product installment payment contract for a phone you are buying. It is not a cell phone service contract.

Re:exactly the same as Blockbuster

[mrchaotica]

Any competent lender is going to provide you with a contract which spells out what happens when the loan ends, what happens if one or both parties terminate early, etc, and in T-Mobile's case, the loan is contingent on maintaining carrier service, and the remedy is full payment of the balance. Otherwise, people will just quit and get a $600 phone for the price of a $99 down payment.

You can't drop the T-Mobile service and just keep paying off the phone in $20 installments? I would have assumed you could... and I guess that must be what the AG is upset about.

Re:exactly the same as Blockbuster

[Anonymous Coward]

"...they are seriously handing money over to the phone manufacturer..." is no doubt better than handing the money over frivolously.

Re:exactly the same as Blockbuster

[Jah-Wren Ryel]

Many consumer product installment payment contracts have similar accelerated payment clauses which can be triggered by loss or damage to the product, changes in borrowers financial status (miss a payment and it all comes due, for example), etc.

What does that have to do with canceling an unrelated service? There is no loss or damage to the phone, there is no change in the phone owner's financial status.

This is a product installment payment contract for a phone you are buying. It is not a cell phone service contract.

A contract that has terms which depend on your use of a service is not a service contract? Doubleplusgood!

Re:exactly the same as Blockbuster

[seebs]

You can pay for the phone and then be done paying for it. You aren't locked into a particular rate plan, and you don't keep paying for it after you've paid its full value. This doesn't sound at all deceptive to me. What they are offering is substantively different from cell service contracts.

Re:exactly the same as Blockbuster

[AlphaWolf_HK]

You're missing the point. Take my case: before switching to T-Mobile, I bought five nexus 4 phones at about 300 a pop. T-Mobile let's me put then on their service for $110 a month for all five lines fully unlimited, and no need for a contract. That's dirt cheap. At&t not so much. At&t I bring my nexus phones over, I still pay as if they subsidized it, which is upwards of $250 a month, AND a have to agree to a two year term. This is where T-Mobile wins, and they shine too.

Thus AG who is complaining about T-Mobile is either a moron or a shill. The later wouldn't surprise me because many politicians are known for granting favors to larger communications providers, and I'll bet that if you look into his campaign finances, there's probably a sprint, Verizon, or at&t line item in it.

Re:exactly the same as Blockbuster

[Anonymous Coward]

Bingo. Nice summary. Last para is the kicker.

(Otherwise would have modded you up, but don't know if that's a useful thing to do unless I really hope it will get a particular post more views.)

Re:exactly the same as Blockbuster

[AlphaWolf_HK]

So buy a nexus 4 from Google. They are great phones and only cost $300. There, no contract.

Re:exactly the same as Blockbuster

[loosescrews]

One difference is that you can cancel the service and continue paying for just the phone part. You could then switch to prepaid or another carrier without paying any fees.

Re:exactly the same as Blockbuster

[cbhacking]

That... actually makes no sense at all. Everything they can do if you refuse to pay the monthly $50 phone bill - turn off your service, ding your credit rating, send it to a collections agency, whatever - they can also do if you refuse to keep paying the $20 loan installments. If you don't need the service anymore and yet want to keep the phone, so you choose to keep sending the $20 payments but not the $50 payments, what are they going to do - turn off the service you aren't using anyhow? Boy, that'll totally show them!

There are methods for handling debt collection. That applies whether it's a $480 loan or a $48000 loan. The difference is whether it's worth the cost to repossess the item, and not much more. There are lots of companies that offer loans in the hundreds of dollars, with payments in the tens per month. The difference is, most of those aren't 0% interest loans. T-Mobile's is, because the value they lose in investment opportunity (interest they could have made if you paid that $480 up front) and inflation ($480 now is worth more than $480 accumulated at the end of two years) is worth less than the extra business they get on their actual business: selling cellular service.

Re:exactly the same as Blockbuster

[Obfuscant]

Either you 'voluntarily' bind yourself to TM or you'll have to cough up all the dough you still owe for the phone.

Or you take advantage of their "no annual contract" offer and get service without an annual contract and no termination fee. You don't have to "voluntarily bind yourself" to anyone. If you choose to do so, that's your choice. Just like you can buy accessories from them. The fact that they offer other things, too, doesn't mean that the advertisement for one thing is deceptive.

Re:exactly the same as Blockbuster

[Anonymous Psychopath]

yes, but not a plan contract....

Does T-Mobile make that distinction plainly in their advertisements?

If not, then it's deceptive. Period.

Yes, they do. It's very easy to understand what their plan entails by simply reading what's on their site. I know, so many werdz, it makes my head hurt! But seriously, it's not at all a hidden or masqueraded charge.

Re:exactly the same as Blockbuster

[Anonymous Coward]

What?

I took Blockbuster up on their offer of a free month last summer and stuck around for a couple of months after that and they didn't charge me a late fee for keeping anything out for over a week which I did a couple of times.

It was a very fair deal, I thought. Only one movie at a time, but I was free to exchange it anytime - even several times a day - or keep it indefinitely.

Re:exactly the same as Blockbuster

[Anonymous Coward]

Personally if you cannot afford to drop $350 000 - $700 000 on a house, then you can't afford a mortgage either.

FTFY.

Re:exactly the same as Blockbuster

[pla]

What does that have to do with canceling an unrelated service? There is no loss or damage to the phone, there is no change in the phone owner's financial status.

It takes quite a stretch to call phone service, on a phone, as an "unrelated service". Kudos!

But for the record, those 0% "loans" from Sears on appliances now take the form of a one-time interest free charge on a Discover card. Cancel the card, and yes, it most certainly does come due instantly.

Re:exactly the same as Blockbuster

[Anonymous Coward]

Are you being deliberately dim or have you not read anything that has transpired in this conversation?

http://prepaid-phones.t-mobile.com/prepaid-phones

Our house alarm is a pay as you go customer with AT&T, no 2 year, or even 1 year, contract required. Just top it off when it runs out of money. Bring your own device to T-mo for $30/mo for 5gb data and 100 mins voice, AND I can switch at any time.

Re:exactly the same as Blockbuster

[Pentium100]

I actually buy phones without a contract. I bought a Nokia N93 just after its release for 724EUR and 7 years later, when it started to fall apart, I bough a used Nokia E90 (for less than 100EUR) because I dislike the touchscreen-only phones - my E90 has a standard keypad (perfect for using with one hand) and a full keyboard (for browsing the net, writing messages using both hands).

Re:exactly the same as Blockbuster

[Anonymous Coward]

Not quite. If they were really separate, you could cancel the service and continue the monthly payments on the phone. You can't -- if you finance the phone through T-Mobile, you are tied to their service as well. Cancel service, and the "early term" cost of them cancelling the financing on your phone could well exceed other carriers' early term fees by a wide margin.

Re:exactly the same as Blockbuster

[Jah-Wren Ryel]

It takes quite a stretch to call phone service, on a phone, as an "unrelated service". Kudos!

I'm not the one calling it that. Everybody who says it isn't a service contract are the ones saying that they are unrelated. Either it is tied to the service or it is not tied to the service. You can't have it one way for marketing and the opposite way for billing.

Cancel the card, and yes, it most certainly does come due instantly.

WTF? Are you so blinded by terminology that you don't understand that you can't "cancel" a card? You can only cancel the line of credit. There aren't two things here, you cancel the line of credit obviously all credits are due.

Jesus fucking christ you people are idiots. All this confusion about how loans work only proves that the AG was correct to make T-mobile spell it out.

Re:exactly the same as Blockbuster

[AvitarX]

In many areas, if you can't afford a mortgage, you can't afford rent.

Re:exactly the same as Blockbuster

[Anonymous Coward]

You can drop the service but you will have to continue to pay the bill for the phone itself, simple as that.

Re:exactly the same as Blockbuster

[Anonymous Coward]

I just upgraded to a new T-mobile phone yesterday. During the process, I had the option of paying the full $584 for the new phone, or $104 down + $20 per month for 24 months. It clearly stated that if I cancel before the 24 months is up, I will owe the remainder of the phone's price.

So I didn't sign a 24-month contract for the phone, I committed to paying the phone's price of $584 by the end of 24 months. You might call that a "contract", but based on what we're used to in the US with mobile phone "contracts", that's not really the same thing at all. I can pay it off tomorrow if I want, and there's no "early termination fee" which has traditionally been the issue with contracts.

Re:exactly the same as Blockbuster

[hazem]

Except that what they charge for the phone is not close to what it actually costs. I can go straight to Google and get a Nexus 4 for $299. T-Mobiles, "full price at checkout" is $408.

Re:exactly the same as Blockbuster

[bogjobber]

They definitely do. I don't really see the AG's point here. I switched to T-Mobile about a month ago and it was perfectly clear that if I received a phone I would actually be paying for it by installment. Zero complaints so far.

Re:exactly the same as Blockbuster

[Anonymous Coward]

It's not that unusual. . .
      Cell Phone Contracts. Who'd a thunk it? That early termination fee - even if it under or over represents the remaining amount of your subsidized phone - is there to cover the carrier, usually and then some, for the cost of the phone if you terminate earlier. In my opinion, T-Mobile's way of handling it is more straight forward and honest. You can see exactly how much you've paid for the phone, and how much you owe. There's never a time where you pay *MORE* for the phone than the price you agreed on. . . assuming you don't renege on that balloon payment.

      A hardware contract with a service plan. Large business phone plans, or any sort of an I.T. contract plan where you have a loan for the equipment will sometimes come with similar terms. Often these are leases rather than purchases, but in the case of the purchase you often get the loan for the hardware as long as you keep the service. If you stop the service and it's a lease they reposes your hardware. If it's a contract where you're purchasing the hardware, then expect a balloon payment in there if you try to cancel your service contract.

Re:exactly the same as Blockbuster

[dgatwood]

It's not unusual in cell phone service contracts, but such tying is fairly unusual in loan contracts, which T-Mobile's equipment loan contracts claim to be.

Re:exactly the same as Blockbuster

[dgatwood]

The problem is that they claim that their service is always without a contract, which simply isn't true. It would be true if they did not force people to pay the full loan amount upon terminating their service, but by tying the availability of the loan to your continued use of their service, the claim that you are not under contract becomes false, or at best disingenuous.

Re:exactly the same as Blockbuster

[JakartaDean]

It's because they don't want to deal with stand-alone micro-loans. Anytime you take on a debt, you enter a contract. What t-mobile is advertising is no contract for service. agree with rudy_wayne.

Not really. It's because, by offering a 0% loan, they are subsidizing the phone sale with revenue from the service agreement. If you decide you want to back out of your service agreement with them, they allow that but they don't want to continue to subsidize the phone. It is of course a bit of lock-in, but so much less so than others that this should be a non-issue. To be honest, this case just shows that Americans have been so badly treated by their phone companies for so long that they no longer understand common sense when it comes to the difference between purchasing a phone and purchasing a phone service.

Fortunately for me, here in third-world Indonesia there are no service plans, and we can all buy as many phones and SIM cards as we want. Result -- people in cities have two, sometimes three phones, and use them a lot very cheaply. People are generally very satisfied with their phone company. Phone companies keep upgrading their infrastructure, and are quite profitable. I don't know what's wrong over there...

Re: exactly the same as Blockbuster

[uglyduckling]

Wow phones are so expensive in the US. In the UK I'm paying GBP40/month (about 30 dollars I think) for "free" iPhone 4S, unlimited data including tethering, 500 talk minutes to any network and 1000 SMS. I didn't pay any upfront fee.

Re:exactly the same as Blockbuster

[SeaFox]

Many consumer product installment payment contracts have similar accelerated payment clauses which can be triggered by loss or damage to the product, changes in borrowers financial status (miss a payment and it all comes due, for example), etc.

What does that have to do with canceling an unrelated service? There is no loss or damage to the phone, there is no change in the phone owner's financial status.

The problem here is without the "it's all due if you cancel service" clause T-Mobile would be leaving themselves open to abuse of the 0% APR financing. AT&T out of stock on the new iPhone 5S? Just go to T-Mobile and sign up with them with their $20/mo payment plan, then cancel the service after you get your phone and have AT&T activate it on their network. See how it would work? In addition to T-Mobile not gaining a new regular customer, which the payment plan is supposed to attract, they're now providing upgraded phone financing to a competitor and have one less iPhone to sell to a real T-Mobile subscriber.

Re:exactly the same as Blockbuster

[Jah-Wren Ryel]

The problem here is without the "it's all due if you cancel service" clause T-Mobile would be leaving themselves open to abuse of the 0% APR financing.

Well then don't do 0% APR.

Or do what the AG made them do - be up front about the balloon payment.

Re:exactly the same as Blockbuster

[pla]

WTF? Are you so blinded by terminology that you don't understand that you can't "cancel" a card? You can only cancel the line of credit. There aren't two things here, you cancel the line of credit obviously all credits are due.

Wha? Calm down, step away from the keyboard, and take a look around before tilting at windmills.

Correct, a card doesn't equal a line of credit. You can have either without the other. But no one - And I do mean no one, ever refers to the one without the other outside a courtroom. A good example of a "service" you can't really decouple from the device in any meaningful way.

Now, if you meant that you don't have any obligation to use that line of credit, rather than spouting off obscenities about suffering all the idiots around, I would agree with you. You can get your appliance interest free for however many months, and then "close your line of credit" ( which the rest of humanity would call "cancelling the card"). The distinction comes up, and indeed, I mentioned it because, some people do not like having credit cards in their name - For example, strict Muslims consider any non-prepaid card a violation of their religion's prohibition against lending money for interest. It therefore matters to some people that their "18 months interest free washing machine" actually comes with a Discover card - and yes, also with an associated line of credit, Mr. Pedant.


Jesus fucking christ you people are idiots. All this confusion about how loans work only proves that the AG was correct to make T-mobile spell it out.

Perhaps some of that confusion comes about from treating "loans" as a monolithic entity. The revolving credit of a credit card functions radically differently than, say, a mortgage, which functions differently than a student loan, which differs from a subsidized purchase under contract.

And none of that has the least bearing on the fact that T Mobile has the most consumer-friendly options available (of the major US carriers, not including the likes of Tracphone here) by far, yet this AG has decided to polish his resume by going after them instead of, for example, the shady backroom deals that limit who you can get an iPhone from.

Re:exactly the same as Blockbuster

[Anonymous Coward]

T-Mobile doesn't want to be in the business of providing 0% loans for non customers, that would be a huge financial cost to the company.

Re:exactly the same as Blockbuster

[cygnwolf]

Sure, but TMobile has loaded their propriarity remix on android on the phone as well, and they charge for that (depsite the fact that you may not want it and are likely to root the phone as soon as you get home anyway...) Oh, and the crapware they make you pay for too. But in all seriousness, T-Mobile is acting as a reseller and there is no way of knowing what google charges them wholesale for the Nexus 4. PLUS google isn't offering the 0% financing as an incentive. (think of the interest as already being rolled in to the purchase price.) Sure you can get it just by driving over to your nearest Google store.... oh, wait, I forgot, they don't pay brick and mortar overhead. All I'm saying is, yes, you can get it cheaper direct from the source. T-Mobile is not the source and they are expected to mark it up. Maybe marking it up by just over 50% is a bit much, but depending on the retail establishment I've seen markups as much as 150%. All that aside though, the thing about T-Mobile's approach to this that is so different from the other big carriers is the fact that you DO have the option to buy one from Google, and pay less on your monthly bill because of that. ATT, Verizon, et al are going to try to charge you the same thing, regardless of if you get the phone from them or from Google. tl;dr- T-Mobile is a reseller, Google is the source. Expect to pay more if you're not willing to put in the legwork.

Re:exactly the same as Blockbuster

[cygnwolf]

Note to self : If you include HTML, then you better use
line breaks and the PREVIEW button....

Re:exactly the same as Blockbuster

[cygnwolf]

There's a huge difference between pay-as-you-go and service agreements. Ususally, though, your level of usages makes all the difference in which is better for you. Your House alarm most likely uses very few minutes a month. Prepaid makes sense because you're not paying for unusued minutes. Have a business that makes you spend hours a day on the phone? A monthly unlimited plan makes more sense becasue your price per minute is much lower. Because of that, in the context of this discussion, (being Tmobile's montly agreements versus other providers) pay as you go doesn't really apply.

Re:exactly the same as Blockbuster

[h4rr4r]

Most mortgages are below that.
The phone is less cost than the contract.

This would be like saying if you cannot drop 20% of the mortgage you can't afford the house, which is true.

Re:exactly the same as Blockbuster

[Jah-Wren Ryel]

You can have either without the other. But no one - And I do mean no one, ever refers to the one without the other outside a courtroom.

Well at least you've got a tenuous grasp on reality. But then you have to face up to the fact that comparing a line of credit to a phone service contract is so utterly random as to be meaningless.

Re:exactly the same as Blockbuster

[mdw2]

It's only deceptive if you're a god damn moron.

Re:exactly the same as Blockbuster

[Fnord666]

I still have to pay off the phone.

This is one of the points that the AG contends is unclear and/or deceptive. Specifically

and it will no longer fail to "disclose that customers who terminate their T-Mobile wireless service before their device is paid off will have to pay the balance due on the phone at the time of cancellation."

From your statement above I'm not sure you realize this. The terms of the "loan" for the handset are contingent on you maintaining service with T-Mobile. By tying these two together the AG feels this violates the "No Contract" advertising.

Re:exactly the same as Blockbuster

[CanHasDIY]

Using the word "period" at the end of your sentence is asinine, aggressive, and adds nothing to your assertion. Period.

What would you call jumping into the middle of a conversation purely for the sake of criticizing the words that someone used? Pedantry? Narcissism? Douche-baggery?

I'd say, all of the above.

Re:exactly the same as Blockbuster

[crypticedge]

I went to the new plans a month ago and my bill dropped by $20 net. It went down $40 because of the plan change, but because of the new handset it took the $20/mo hit, putting $20 back in my pocket while giving me a brand new higher end phone that works correctly (my old one was broken)

Re: exactly the same as Blockbuster

[gnasher719]

Wow phones are so expensive in the US. In the UK I'm paying GBP40/month (about 30 dollars I think) for "free" iPhone 4S, unlimited data including tethering, 500 talk minutes to any network and 1000 SMS. I didn't pay any upfront fee.

_Phones_ are cheaper in the USA, a lot cheaper. _Phone service contracts_ are a lot cheaper in the UK. Compare the price for on iPhone on the US and UK store (although the price difference is mostly due to 20% VAT, and you get better consumer protection in the UK, which is obviously included in the price). Now take the price for an iPhone on the Apple store, divide by 24, subtract from the phone contract cost so you know what you actually pay for the service, and the service is UK is absolutely cheap compared to US.

Re:exactly the same as Blockbuster

[Anonymous Coward]

T-Mobile should just kill the loan process altogether.

If you have a phone, then you can start service. If you don't have a phone, you can buy a phone with your damned credit card and not be able to bitch about the monthly payments as though the carrier is being deceptive.

Then, enjoy paying for your phone via your monthly credit card bill (whether or not you continue the wireless service) and with nobody to blame but yourself for the financial obligation. Ooops. That won't fly. People refuse to take responsibility for their own actions these days.

Re:exactly the same as Blockbuster

[meatspray]

They're simply doing this wrong. There is an easy, beneficial solution.

If you want to stop "contracts", offer to finance the phone and put them on pay as you go.

They leave, they stop paying the pay as you go but still pay monthly+interest for the phone.

It is what it says, no one gets screwed.

I HATE cellphone subsidy, there's no reason to wrap the equipment in with the service, especially on GSM.

Re:exactly the same as Blockbuster

[meatspray]

it's honestly a little worse, at least termination fees are slightly lower than the cost of a new handset.

Re: exactly the same as Blockbuster

[meatspray]

that and unlimited data has become a 4 letter word.

Re:exactly the same as Blockbuster

[nobodie]

so, wake up a bit, if i walk in the door and open an account for a phone number by purchasing a SIM card from them and putting it in my phone that I paid off at ATT will they say OK? Cause it sure sounds like they will and they won't enforce any contract. I don't see where that is false advertising. Now if they require you to purchase a phone and require you to buy it by paying on a monthly purchase agreement and force all these requirements on you that don't relate to an airtime contract except that you must sign them to get an airtime contract then, and only then, do i see a problem.

Re:exactly the same as Blockbuster

[Anonymous Coward]

They've not completely separated the service plan from the handset purchase, as the two are not billed separately. They also make you sign a contract (for the loan on the handset purchase, admittedly) that states they will call in the loan immediately if you cancel your service. It's disingenous to say that there's no contract though.

Don't get me wrong, it's an improvement over the business model of the other major carriers, in that your bill goes down once you've paid off the phone, or immediately if you buy outright or bring your own. Also, the phones purchased via this scheme are not SIM locked, and the "call in the loan" provision essentially amounts to a pro-rated early termination fee.

Re:exactly the same as Blockbuster

[TsuruchiBrian]

The end result is that the best option for tmobile customers is a contract free plan. You are not forced into a contract. Granted you are not forced into contract at other carriers either but in those cases the contract free plans are much worse than the contract plans.

A new restaurant says "We have vegetarian food now". It turns out they still have meat dishes. Alice points out that although they still have meat dishes, they now have vegetarian options. Bob says, yeah but even KFC has vegetarian food by that logic. Does the restaurant have to eliminate all meat from it's menu to claim to be a vegetarian restaurant? I don't know. I do know that there are certain restaurants that really try to have good vegetarian food even if they still serve meat. I would say T-Mobile is a "contract free" friendly carrier, in the sense that people who didn't want contracts might actually want to be customers there. They still offer contracts to meat eaters, but the main focus is on contract free vegetarian food.

Re:exactly the same as Blockbuster

[aklinux]

Which is why if T-Mobile were available in my part of the world, I would at least try their service.

Re:exactly the same as Blockbuster

[Occams]

Phones purchased like that are always grossly over-priced. The full cost is usually hidden by the service contract. Now it will be clear. That's good.

Re:exactly the same as Blockbuster

[tjhart85]

No, they do not MAKE you sign a document. You are completely free to pay for your phone 100%. If you choose to instead take out a 0% loan, they will do so for you.

Re: exactly the same as Blockbuster

[Anonymous Coward]

Have you compared the cost of the hardware vs a typical smart phone 2year contract? Basically no comparison-phone about 25% cost of service contract. To me it's a great deal for those who want to go that way. Plus interest free purchase on time with both T Mobile and Apple making a relativity affordable option for those who can't afford the contracts or a one time hit. Free or subsidized phones AND pay as you go? Only makes sense to those with the entitlement gene or of course the 40+ states who sued.

Car analogy

[michaelmalak]

Yeah, that car I just bought? I'd like to cancel that payment stuff and just keep the car.

Re:Car analogy

[RazzleFrog]

Well in this case you'd have to continue paying for the car but it no longer can move.

Re:Car analogy

[hedwards]

The point here is that nobody is claiming like they aren't giving you a contract with regards to the car. An auto loan is clearly a contract and most dealers don't advertise them anyways, they typically advertise the cars and their financing options.

In this case, T-Mobile is advertising no contract plans that aren't actually no contract plans, which is why they're getting sued. I wasn't aware that they were doing this, but if they really were, then the advertisements are clearly misleading.

Re:Car analogy

[rotaryexpress]

No, in this case you can pay for the car but only drive it for emergencies.

Re:Car analogy

[darkwing_bmf]

The phone service plan (i.e., getting a signal) is no contract. Buying the phone itself, *if you choose to buy a phone from them using an installment plan*, is a contract.

Re:Car analogy

[Anonymous Coward]

ObamaCar!

Re:Car analogy

[rickb928]

I'm a subscriber, and I don't see the deception. Somewhat inadequate disclosure, maybe, but I have no service contract. And I always understood that the phone was so much down, so much a month for so many months. And that was EXACTLY how it was explained.

Now, I bought my new phone for $99 down, $51 tax (dead giveway that this is not so simple there!!!), shipping, and $2/month for 24 months. My phone will cost me about $636, tax & shipping included.

And in 2 years, when I 've paid off the phone, or sooner if I choose, my bill goes down $20/month.

The last 2 times I kept a phone beyond the contract expiration, I kept one for 18 months past, the other for 8 months past. In both cases, my bill did not go down. I was still paying as if I were paying off a subsidized (or financed) phone - terrific windfall for my carrier. Now, that won't happen. And I keep the phone. And it will actually work on another carrier's system; I am permitted to unlock it when I pay it off, if not before.

BTW, in TMobile's new plans, there is very little incentive to lock the phone. They get paid for the phone anyways, no contract means leaving whenever, so locking is something of a legacy from the dark past. AT&T, are you listening?

Re:Car analogy

[hedwards]

And your point is? Viewing the commercials I didn't see anything that indicated that. I'll have to pay closer attention next time they come on, but I don't recall seeing any fine print that indicated that.

The WA AG is suing because it's a false advertisement, not because the terms of the deal are necessarily unfair, but because they've apparently had ads which were deceptive put on the air.

Re:Car analogy

[admdrew]

T-Mobile is advertising no contract plans that aren't actually no contract plans

They actually *are* no-contract plans, it's the phone that has a loan (contract). So while you're kinda functionally correct in your statement, legally you're not, which is why this likely will go away.

Personally, I haven't seen them be deceptive about it when you actually go into the store or try to buy a phone online; they're very clearly 1) showing you your separate monthly cost of the phone and 2) showing how much left you owe on it. The whole contract thing may be a minor legal distinction that they're technically correct in advertising, but I haven't seen them be overtly deceptive like the AG seems to claim.

Re:Car analogy

[darkwing_bmf]

Do the ads say you have to buy the phone from T-Mobile?

Re:Car analogy

[realityimpaired]

There is no fixed term to your service, there is no penalty for terminating the service (you just pay back what you borrowed, no extra $100 "convenience" fee), and there's no automatic renewal. I haven't read all of the fine print, but if they're anything like my own cell phone company (which also has a no contract option), you can pay off the balance owing for the phone at any time, too.

You're being pedantic and deliberately obtuse, when you know full well that they are not offering a term contract.

Re:Car analogy

[Opportunist]

Tiny difference. It's more like the dealer where you have that monthly plan going also has a fuel station and you'd have to use his fuel station for your fuel needs or the rest of the amount you owe is due tomorrow.

Re:Car analogy

[Jah-Wren Ryel]

I'm a subscriber, and I don't see the deception.

Then you aren't looking closely. If you cancel your service in less than two years you must immediately pay the balance on that loan for your phone. That's a contract tied to your "no-contract" service.

Re:Car analogy

[LordVader717]

Legally every purchase you make is a contract. But in this context it's pretty clear what they mean by "no-contract": You can use the service without committing yourself to recurring payments.
From their website it seems like they're separating the concepts of financing a new phone and using the service as much as they should need to and they let you pay up front if you want to do that. If you want a phone you have to pay for it. Anyone who thinks this is unfair is clearly delusional from years of absurd marketing strategies by the telcos.

Re:Car analogy

[mtb_ogre]

Or... sell the car to someone who is willing to buy gas.

Re: Car analogy

[Anonymous Coward]

Except you can get a no contract, by any definition, by providing your own phone. So there is a no contract option, there are also contract options. Are they obligated to advertise every possible permutation they offer?

Re:Car analogy

[dgatwood]

The phone service plan (i.e., getting a signal) is no contract. Buying the phone itself, *if you choose to buy a phone from them using an installment plan*, is a contract.

Yes, but the conditions of that loan contract mandate continuous service. Therefore, the phone service plan is only a no-contract plan if you pay for the entire cost of the phone up front. If you pay for it on a monthly basis, you not only have a contract for the loan, but also (in effect) a contract on your phone plan that is tied to that loan contract.

Re: Car analogy

[Jah-Wren Ryel]

So there is a no contract option, there are also contract options. Are they obligated to advertise every possible permutation they offer?

No. But when they do advertise the contract plans they are required to call them contract plans. That's all the AG is asking for, just advertise them truthfully. I can't believe there is so much opposition to such a basic requirement. Since when has truth in advertising become some sort of unnecessarily onerous interference in business?

Re:Car analogy

[Anonymous Coward]

Tiny difference. It's more like the dealer where you have that monthly plan going also has a fuel station and you'd have to use his fuel station for your fuel needs or the rest of the amount you owe is due tomorrow.

Try again...

In your analogy Tmobile should be the gas station not the car dealer.

You buy the gas, you can decide not to buy the gas from them anytime, no problem, you aren't signing any contract to buy gas..Oh by the way, if you want to buy a car you can, in fact I'll sell you one with zero interest and let you pay over 24 months, but if you decide to stop buying gas from me then I'm going to need you to pay off that car.

There is still no contract to buy gas here. Stop pretending like there is.

Re:Car analogy

[Opportunist]

No, there is no contract to buy gas from me. You can buy gas from any place you want. But if you do, you pay off the rest of what you owe me for your car NOW. Forget about spreading it out over the next 24 months, the moment you buy your gas somewhere else I want my money (again, we don't have a contract for gas, you can without a problem go wherever you want and I'll not charge you a cent for doing so). All I say is that if you opt to go to a different garage, which is entirely in your rights and there's nothing I could do to keep you from doing so, I can't charge a dime from you if you decide you don't like my gas anymore.

All I want is what you owe me. The moment you leave. Hand it over. All of it. Not your monthly rate. ALL of it, the whole sum that you still owe me for the car, fork it over.

Of course, you can stay and keep buying gas from me. Then I'll just want my monthly rates from you and everything's gonna continue like it did so far. Of course we don't have a contract for gas, and we still don't.

You can leave any time you want. If you can pay off the rest that you owe me, that is.

Re:Car analogy

[sudden.zero]

You mean like in the case of having an accident, the car is totaled, it is no longer worth what you owe, but you still have to pay the remainder of the payments?

Re:Car analogy

[geekoid]

Becasue people insit on a car example, here is an accurate one.

A car dealership has no contract cars. You pay cash and leave.

TMobile has a no contract service, you pay for the phone, and you are good to go.

They offer EXACTLY what the advertise.
Car dealerships ALSO have car purchasing contracts, loans.

Tmobile ALSO offers contract services.

The only difference is in T-mobile case, they are ALSO the loan company.

Re:Car analogy

[geekoid]

Except they offer EXACTLY what they advertise. They also offer other things as well.
Here is the ads I have seen:
http://www.youtube.com/watch?v=5N9N1jYw_kA

and this one:

http://www.youtube.com/watch?v=EOP3cFzZehU

and here:
http://www.youtube.com/watch?v=4rRjIGAlIdI

Re:Car analogy

[geekoid]

", it's the phone that has a loan (contract). "
IF you want to do that, you can also bring in your own devices, or pay outright.

Re:Car analogy

[geekoid]

It's like getting a car from shell and a 0% loan with the agreement you use shell for gas.
You can also use Shell without a contract, if you paid for your car.

Re:Car analogy

[Anonymous Coward]

In your car analogy, you are free to go somewhere else for gas and mechanic services but that doesn't mean you get to stop your car payments.

Re:Car analogy

[admdrew]

Yeah, exactly. Personally, I've been pretty happy with T-Mobile, and have brought my own device (heh, the online stuff doesn't even recognize my Galaxy Nexus), even before they did these new plans. Now I can decide whether or not to go to the HTC One, although I'd like to wait until the Cyanogen dudes get it all working there.

Re:Car analogy

[Opportunist]

Yes, but the moment you get your gas from another place, the rest of what you owe for the car is due. THAT is the deceptive part. Not that they still want to get the rest of the money you owe. The issue here is that canceling the calling plan makes the full amount of what you still owe due.

TFS (as well as TFA) is a wee bit misleading here. It makes it sound like Washington State Attorney General is completely insane for wanting people to pay what they owe. Like, "he said no contract, so NO contract may exist". That's not the problem, and if you read TFA you'll notice that that portion didn't even change. The problem isn't that you still have to pay off the rest of the phone. The problem is that the moment you quit, the installment plan is canceled and the money is due in full instantly, locking poorer customers into a contract that may be unfavorable for them, despite the ad that says "no contract". That part stays as well, but it's now much easier to understand the implications of (i.e. that you have to cough up the full amount you still owe the moment you decide to go away from them).

Re:Car analogy

[Obfuscant]

In this case, T-Mobile is advertising no contract plans that aren't actually no contract plans,

They're advertising no contract CELL SERVICE plans. There is no contract for that. No annual contracts for their phone service.

You want to buy a phone from them on the installment plan, well, no reasonable person would expect there would be no contract for that. What sane person would hand out phones on an oral promise that "I'll gladly pay you tomorrow for a hamburger today", as Wimpy would put it? In writing? It's a contract. For the cell phone. In writing? Read it before you sign.

And what sane person would ever think that all provisions of ANY contract are going to be presented in a 30 second radio or TV spot? Have you ever seen ANY company do that? Some of them put in a lot of small print, but the contract always has more. Except in Mr. Washington State AG's world.

Re:Car analogy

[Obfuscant]

You can leave any time you want. If you can pay off the rest that you owe me, that is.

What you've missed is that there is no requirement for me to buy a car from you to start with. I can buy gas from you with no contract and no "termination fee" when I decide to buy gas somewhere else. You would be quite accurate and honest if you advertised "no annual contract" gasoline purchases.

There is no termination fee if I get phone service from T-Mobile. I don't have to buy a phone from them. They are offerering no-annual-contract phone service, just like the ads say.

Re:Car analogy

[Opportunist]

Again: The problem isn't that the payments remain. The problem is that they do NOT. They're replaced by one payment, for the rest of the amount you still owe on the phone, due the moment you cancel your calling plan.

Re:Car analogy

[hedwards]

And so do the other carriers. I can do that with other carriers. I didn't bother watching the ones other than the first link, but they're clearly fraudulent advertisements. T-Mobile is not the only carrier that lets you go without a contract. And claiming that they are is in fact deceptive marketing.

I'm really curious as to how you explain that away. Because it's clearly a lie that T-Mobile is doing something novel that's not available from the other carriers.

Re: Car analogy

[Anonymous Coward]

As an outsider looking in, the explanation I can give you is that americans have an irrational fear and distate for every things government, it's the ultimate boogeyman because "The Man is out to get us". OMGWTFBBQ!!1!1 teh gubermints are interfering with the phone companies, poor T-Mobile, let's all rally around them and protect them from the evil power of the government. (Never you mind the fact they're getting shafted by T-M and the government is actually trying to do them right, but since there is little to no consumer protection, pretty much everyone is used to getting fucked in the butt with a 12" cock, without KY, so much so there's an almost Stockholm syndrome permeating society from top to bottom...)

But, I digress.

(disclaimer, I lived 5 years in the US, 3 in northern CA, 2 in NC)

Re: Car analogy

[Anonymous Coward]

There isn't a contract plan.
You have a plan you can terminate at any time.
You have a phone you have to pay off.

Re: Car analogy

[rickb928]

What opposition?

Re:Car analogy

[Opportunist]

That has never been an issue. The issue was that WHEN you add a phone to the contract, you MAY face a balloon payment. From TFPR (the f... press release):

The company also agrees that it will:

• Not misrepresent customers’ true obligations under the terms of its contracts for the sale of service or equipment;
• Make clear the consequences of cancelling T-Mobile service, including restrictions or limitations on cancellation; fees and costs; and early termination fees;
• More clearly state in all advertisements the true cost of telephone equipment, including the requirement the customer carry a wireless service agreement for the life of the 24-month financing plan;
• Instruct representatives to fully disclose obligations under the terms of its contracts, including developing a “Frequently Asked Questions” page; and
• Train customer service representatives to comply with the settlement within 21 days of signing.

Not unreasonable if you ask me. All they really have to do is point out that the rest of what you owe on the phone is due the moment you cancel your contract, and in the ads (which I don't know, I have to admit, so it may already be the case) they can't say that you could get a 0% financed cell with your non-contract, or somehow point out that bit about how all is due instantly if you cancel the contract.

Re:Car analogy

[rickb928]

You say contract, i say potahto.

I'm looking at this correctly. I agreed to buy the phone on installments. I have no service contract.

I also recieved an installment loan agreement in email that matches the one I completed online. It was fully disclosed, even stating the APY was 0.0%.

If you're thinking this is deceptive, you are mistaken. Period.

Re:Car analogy

[Jah-Wren Ryel]

If you're thinking this is deceptive, you are mistaken. Period.

That's interesting. Perhaps you can point out where in the ADVERTISING that it said (before the AG pursued this case) that the installment plan would be terminated with the balance immediately due should you cease using t-mobile's phone service.

?

Re:Car analogy

[Anonymous Coward]

In this case, T-Mobile is advertising no contract plans that aren't actually no contract plans,

No, they said no Annual contracts. That's a one-time, it's not "annual".
OTOH it's pretty deceptive (and somewhat standard) Marketing and it's nice to see them being held to account for it.

Re:Car analogy

[mrmeval]

I thought they were telling folk that it's a no contract plan but that they could pay the phone off with the regular bill. I don't see a problem with this unless they're being deceptive about it.

Re:Car analogy

[Anonymous Coward]

T-Mo's plan got rid of the fuel station restriction. You can transfer carriers (stations), but you'll still get the monthly bill from T-Mo for the handset(car). Guess the Washington State AG doesn't understand the competitors cell phone plans with early termination fees above the retail price of the handset, which would be something worth slamming.

Re:Car analogy

[Anonymous Coward]

The phone service plan (i.e., getting a signal) is no contract. Buying the phone itself, *if you choose to buy a phone from them using an installment plan*, is a contract.

Yes, but the conditions of that loan contract mandate continuous service. Therefore, the phone service plan is only a no-contract plan if you pay for the entire cost of the phone up front. If you pay for it on a monthly basis, you not only have a contract for the loan, but also (in effect) a contract on your phone plan that is tied to that loan contract.

The difference is in the accounting. AT&T for example doesn't line-item a charge for the handset loan, which allows them to actually recoup far more than retail price if they want to. And since it's all "built-in", it doesn't count as interest it's just general revenue for them, allowing them to bypass laws limiting interest rates on consumer loans.

But the ads I saw all said no "annual" service contract. So I dunno, buyer beware I guess.

Re: Car analogy

[cbhacking]

Except, the phone financing plan (literally, it's just a zero-interest loan on a phone) is *completely separate* from the service plan. You can, if you want, cancel the service plan and keep paying off the loan. You can also pay off the loan early, or buy the whole phone up front, or bring your own phone. There's no early termination fee on the phone service; you just have to pay off the loan you took on the device. The $20 for the phone and the $whatever (typically 50, under their new M2M plan they're pushing) are typically sent on a single bill, but as separate line items. There's no "new 2-year activation required" when you get a phone under this agreement either, although you *might* need to be an active subscriber the get the financing in the first place. If that's not the case, I could see the AG's point, but otherwise I really don't; the service plan is contract-free, and the option of getting a phone on a payment contract is separate from it. Only in the US would people assume that because you signed up for phone service at the same time you took out a loan on a phone, the loan contract has anything to do with the phone service plan...

The car analogy is exactly correct, especially because the car does not, in fact, "stop working" just because you stop paying the T-Mobile monthly service bill; buy a PAYG SIM and put it in, or switch to AT&T, or switch to one of the GSM resellers in the US, or move overseas, or even just go SIM-free and use it as a WiFi PDA that can also call 911 in an emergency. The freedom to do that is what makes it contract-free... and it's important to note that, unlike AT&T and some of the other companies, T-Mobile is happy to SIM-unlock your phone for you.

Re: Car analogy

[Jah-Wren Ryel]

Except, the phone financing plan (literally, it's just a zero-interest loan on a phone) is *completely separate* from the service plan. You can, if you want, cancel the service plan and keep paying off the loan.

No you can't. You must IMMEDIATELY pay off the loan. Not "keep paying off," pay it in full immediately.

You cancel service it changes the terms of your phone loan. Why is this so hard to understand?

Re:Car analogy

[FatLittleMonkey]

It seems the difference is that other major carriers charge the same amount whether you take the subsidised handset contract or not. Their "no contract" rate is the same (or higher) than their contract rate with free handset. T-Mobile separated the two. You have a rate for service, no matter where your handset comes from, or you can choose to buy a subsidised handset on a separate contract, with extra repayments and special provisions for cancellation.

You might wish they offered the handset-subsidy as a zero-interest micro-loan with no balloon payments regardless of whether you use their cell-service, but the question is whether it is "reasonable" for you to expect them to do so based on their advertising -- whether a "reasonable person" (ie, a person of average intelligence, education and experience, and not a lawyer, specialist, or moron) would gain that expectation from their ads. And I think any "reasonable person" would expect that the handset-subsidy would have additional conditions that the BYOD service doesn't.

Now if, when you sign up for a subsidised handset, those extra conditions deliberately buried - or sales staff deliberately mislead customers about those terms - then yes, that is misleading. But that's a different issue, and doesn't appear to be what the AG is poncing on about.

Frankly, what T-mobile is doing is what the entire industry should be required to do. Service should be separate from subsidy. Prices should be transparent and unambiguous. If, in addition, a company wants to offer zero-interest micro-loans, hey go nuts.

Re:Car analogy

[FatLittleMonkey]

The point of contention seems to be the immediate full payment for the handset on termination of service. As someone who went through the process, were you aware of that condition (not just buried in the fine print), and do you feel that a reasonable person would have a reasonable expectation that the handset micro-loan would continue past the termination of the service. Ie, did the puffery you encountered before signing the contract make you (or a reasonable person) think that.

Re:Car analogy

[FatLittleMonkey]

Perhaps you can point out where in the ADVERTISING that it said (before the AG pursued this case) that the installment plan would be terminated with the balance immediately due should you cease using t-mobile's phone service.

The claim is deception. The burden of proof is on the claimant. Can you show where the advertising created a reasonable expectation (the test for deception is reasonableness) that the balance for the handset wouldn't become due if a person took out an instalment plan then cancelled service?

Re:Car analogy

[Jah-Wren Ryel]

Uh yeah, the part where they said "no service contract." If ANY part of any contract depends on the service, it is a fucking service contract. By definition.

Re:Car analogy

[rickb928]

No part of the phone purchase contract requires service. Cell service is not dependent on the phone purchase contract.

Every time I spoke with a rep, they kept repeating the terms; 24 months, $20 per month, $99 down payment.

Seriously, I get that the Washington AG found enough cause to compel TMO to offer more disclosure, but I have not yet found anything that was not exactly as I expected it.

Re:Car analogy

[rickb928]

I was always entirely aware of the installment plan. It was never, to me, hidden, obscured, or less than fully disclosed.

Now there are, I guess people out there that think you can get a $600 phone for $99 if you have a plan, and if you terminate the plan you ought to walk off with the phone for a fraction of its retail value.

So who's the idiot here? Me, who gets it, or the unwashed who think they get the phone for a pittance? Go ahead, explain how the average moron is indeed paying so little attention they think that embedding the cost in the plan is such a deal.

And where I work, we also need to disclose terms and conditions. Our standard is that these terms and conditions are understood by our customers, or we explain it sufficiently that they can repeat back these terms and conditions accurately. And then we ask if they agree. Merely meeting the letter of the law is no longer sufficient. SO I get it, but I got it with my Tmobile plan without lengthy explanations, though they were offered. I wasn't misled by any advertising. TMobile's point is that they sell you service and the phone separately. If you choose to pay for the phone over 2 years, well, 2 years it is.

Re:Car analogy

[Jah-Wren Ryel]

You keep dancing around the issue.

Do you understand that if you cancel service your loan is immediately due in full?

Re:Car analogy

[PrimaryConsult]

I didn't bother watching the ones other than the first link, but they're clearly fraudulent advertisements.

You formed an opinion on all three by watching only one? I don't even need to correct you: you've automatically invalidated your opinion.

Re:Car analogy

[Jah-Wren Ryel]

Now there are, I guess people out there that think you can get a $600 phone for $99 if you have a plan, and if you terminate the plan you ought to walk off with the phone for a fraction of its retail value.

So who's the idiot here? Me, who gets it, or the unwashed who think they get the phone for a pittance?

You are. This has never been about, "getting the phone for a pittance." NEVER.
If you still think that is what we are talking about, go back, reread over and over again until you do understand.

This has ALWAYS been about canceling the installment payment plan in favor of a balloon payment if cell service is canceled.

The fact that you keep going on about not fully paying for the phone suggests you really didn't know what the terms were, that the AG really was correct to charge T-mobile.

Re:Car analogy

[rsborg]

Tiny difference. It's more like the dealer where you have that monthly plan going also has a fuel station and you'd have to use his fuel station for your fuel needs or the rest of the amount you owe is due tomorrow.

And all the other major dealers in the US have a monthly "fuel" plan for your car, but you can't switch "fuels", if you do, your car no longer works and you owe them a hefty prorated fee ( maxing at 75% of purchase price of the car). I still think t-Mobile comes out looking better given the competition.

Re:Car analogy

[ngocbg]

Trang ch Tin tc Phn mm c truyn

Re:Car analogy

[Anonymous Coward]

omai goodTrang ch

Re:Car analogy

[rickb928]

Of course I do. Do I look that stupid to you?

Re:Car analogy

[Jah-Wren Ryel]

Of course I do. Do I look that stupid to you?

Considering how focused you have been on the red herring of getting a phone for practically nothing, yeah, you really do look that stupid.

Re:Car analogy

[rickb928]

When did *i* even state that I got a phone for 'practically nothing'?
Your poor comprehension skills are causing you trouble here. I've never thought or said I believed I got a phone for 'practically nothing'.

You are in error.

Re:Car analogy

[Anonymous Coward]

same here but I bought my own phone, A nexus 4 as it was $200 cheaper direct from google, and I am on A no contract plan, just bought Ann essentially free Sim card from them and signed to my chosen monthly plan.

This is nothing but problems with people who have the attention span of hyperactive gnats.

Re:Car analogy

[Anonymous Coward]

The point here is that nobody is claiming like they aren't giving you a contract with regards to the car. An auto loan is clearly a contract and most dealers don't advertise them anyways, they typically advertise the cars and their financing options.

In this case, T-Mobile is advertising no contract plans that aren't actually no contract plans, which is why they're getting sued. I wasn't aware that they were doing this, but if they really were, then the advertisements are clearly misleading.

That's 100% accurate, there's no contract on the service, but you make separate phone payments (even separated on the bill), there's a contract on the price of the phone, you must pay it off. When the phone is paid off you no longer have to pay that charge.

This is ridiculous, T-Mobile is getting attacked for doing the right thing here, not the wrong headed stuff that's been going on for 2 decades.

Re:Car analogy

[scott_obryan]

That's not true. Basically T-Mobile will 'lend' you the money for a new phone. The agreement says that if you get rid of the service, then you need to pay them off for the loan. I don't think this is unreasonable at all and, frankly, I hope T-Mobile hits it big with this new plan. So many wireless companies give you crappy customer service because they know they have you locked in for 2 years. As a matter of fact, most service providers will not even let you BUY an unlocked phone and even if you have one, you still need to sign a contract. With T-Mobile, you have the option of buying the phone outright or allow them to lend you the money. At the end of the day, if T-Mobile doesn't do right by the customer, their customers will go elsewhere. This gives them more incentives then the competition and, having dealt with the competition myself, I can tell you that it's time that the "mobile mafia" needs to come to an end. +1 T-Mobile.

Re:Car analogy

[Anonymous Coward]

Wrong. You can fill up at other stations if you want to, but you still have to make the car payment to the dealer and pay for the car in full, as you promised.

Re:Car analogy

[Anonymous Coward]

I love this comment! This is what keeps me back on Slashdot! LOL

Re:Car analogy

[Obfuscant]

Not unreasonable if you ask me.

The actions aren't unreasonable, but the fact that the government is stepping in demanding that they do this because some people are idiots and don't read the terms of a loan contract they are voluntarily signing is the unreasonable part.

I watched the T-Mobile ads last night, and not a single one of them was misleading or confusing. They haven't hid time to roll out the new versions, so these were the same ones that confused the Washington AG. If they did, it says a lot about him.

or somehow point out that bit about how all is due instantly if you cancel the contract.

What else do you want them to "point out" in a 30 second TV commercial? Frequencies? That you have to have your phone turned on to be able to make a cell call? That you need to charge the battery every so often?

It seems like common sense that if you choose to stop doing business with a company that means you stop doing business with that company, including any loans that you may have outstanding. It seems like common sense that when you stop doing business with someone with whom you have an outstanding loan balance, that you don't get to just walk away without paying it off. It seems "common sense" doesn't live in the Washington AG office, however.

Re:Car analogy

[Anonymous Coward]

Yep! Well stated.

Re:Car analogy

[Jah-Wren Ryel]

When did *i* even state that I got a phone for 'practically nothing'?

Why are you asking me that? I never said you said that. Why would I have said that? What part of my arguments would that have lent any validity to?

Obviously you know that I never said that nor even suggested it. Which leads to...

Your poor comprehension skills are causing you trouble here

And you've now retreated to that last bastion of weak minds who have realized they were wrong all along -- trying to deflect with bullshit strawmen.

Re:Car analogy

[rickb928]

" Considering how focused you have been on the red herring of getting a phone for practically nothing, yeah, you really do look that stupid."
Your words, not mine.

Re:Car analogy

[Jah-Wren Ryel]

Do I need to diagram the sentence for you? That you think there is some sort of "gotcha" in there just says you can't parse even moderately complex grammar. That's quit ironic given your accusations of "poor comprehension skills."

What is particularly bad form on your part is that even if you can't comprehend my words, you should have at least had second thoughts about jumping to stupid-ass conclusions given that you had just written the following two lines:

"the unwashed who think they get the phone for a pittance?"

and this:
"I guess people out there that think you can get a $600 phone for $99 if you have a plan, and if you terminate the plan you ought to walk off with the phone for a fraction of its retail value."

Re:Car analogy

[Jherek Carnelian]

"No part of the phone purchase contract requires service."
"if you cancel service your loan is immediately due in full"

Both of those can not be simultaneously true.
An honest man admits he was in error, are you an honest man?

Re:Car analogy

[Anonymous Coward]

That is why, as consumer, you should READ everything, and most of the time they are written very very small so that even a 20/20 vision would still need a magnifying glass to be able to read the contract.

Re:Car analogy

[tjhart85]

I don't see how it would be Ford's fault if you choose not to fill up your gas tank.

Schrödinger's Contract

[mikeroySoft]

The "no-contract-contract", sold from within a sealed box.

Re:Schrödinger's Contract

[girlinatrainingbra]

Can I sign it (the Schrödinger's Contract) with quantum cryptography? Then no one, even myself, will know what I've signed or even whether I've signed it...

Re:Schrödinger's Contract

[Tablizer]

But it has a "no recursion" clause inside the "no recursion" clause.

Re:Schrödinger's Contract

[Anonymous Coward]

Keep in mind better than Verizon today basically saying no grandfathered in unlimited data accounts....
- http://blog.collins.net.pr/2013/04/verizon-tiered-data-plansuhm-just-say-no.html

If you want to upgrade to the new S4 then you've got to pay everything upfront or move over to tiered data plans. basically they don't give a shit about their existing clients.

Re:Schrödinger's Contract

[KGIII]

If it goes to court and the judge insists on opening your contract box in his chambers, by himself, and somehow dies before he tells anyone if you signed the contract or not then is the contract signed or unsigned if you signed it via quantum cryptography?

Also, did anyone observe you signing it with your quantum cryptography?

Deceptive?

[Anonymous Coward]

Deceptive? I thought that was clear as day.

What an idiot

[geekoid]

The contract is only if you don't pay for the phone upfront. Obviously if you are pating for it a month at a time they want you to finish paying before you leave.

Right now, you can walk into a T Mobile store, plunk down cash and get a smartphone and not have a contract beyond a month to month agreement; which you can end without fees.

I wonder if it was AT&T or Verizon the complained?

Re:What an idiot

[MBGMorden]

Right now, you can walk into a T Mobile store, plunk down cash and get a smartphone and not have a contract beyond a month to month agreement; which you can end without fees.

You can do that with just about any carrier. The only real difference is that T-Mobile cuts you a break on your per month price for not taking a subsidized phone. With Verizon, AT&T, or any other carrier you can sign up without a contract, its just that you'll be paying the same price as the guys who took the free/cheap phones.

Re:What an idiot

[hedwards]

The point is that this has been the case with all the carriers for quite some time. You could go month to month and not get the included phone. Now you don't get a rate break if you don't do it, but you don't have the early termination fee either.

By advertising them as a no-contract network they were deceiving potential customers and putting themselves at a competitive advantage without actually having to do anything other than claim that they were doing something differently.

Re:What an idiot

[Anonymous Coward]

No. The service really is no contract. The ENTIRELY OPTIONAL 0% interest loan they give you to subsidize the phone has a contract that requires you to pay it off if you cancel service.

Re:What an idiot

[TsuruchiBrian]

Does "no contracts" mean "You *can* get service without a contract" or does it mean "It is impossible to get stuck in any contract".

It is pretty obvious that they mean the former. The only way to offer the latter is to remove the *option* to pay for your phone over 2 years and force every customer to pay for their phone up front.

This is a better system because it gives customers more options.

Also I'm fairly sure that they explain to people that they are signing a contract to pay for their phone when they give you an iphone (something that retails for like $600) for $99. It's just not a service contract. It's a loan contract.

Re:What an idiot

[Opportunist]

There are two problems with this whole deal. First is something our law calls "reasonable expectation". Now, I don't know if the US have something similar in place, but if not, at least not acting in the spirit of that law makes you a pretty big asshole. The deal here is that when you enter a contract, you have a "reasonable expectation". When I hire a tiler, I do reasonably expect him that he knows how to do it, that he brings his own tools, that he will cover my floor and/or walls in tiles (and not, say, mortadella). Anything that I may "reasonably" expect but is NOT the case has to be explicitly stated and, depending on who are the parties in the contract, may need to be printed out boldly and signed separately, just to be sure it's not hidden somewhere in the legalese bull. When you enter in a deal with a party that advertises something in one way and then it turns out it's exactly the other way around, it's at the very least deceptive.

The other, and bigger, problem is that it's due entirely the moment you decide to leave them. That allows them to force their poorer customers into staying because these people cannot afford to pay off 200+ dollars NOW.

Now, as odd as it may sound, I wouldn't have so much of a problem with the first issue. There's nothing wrong with selling a phone in installments. Cars have been sold that way for decades, why not phones? The problem is rather that people who have to buy a phone on installments are also the same people that can't simply cough up the rest of the amount owed instantly. Else, why the installment in the first place? These people are locked into a contract they can't get out of because they simply cannot afford it. There would nothing be wrong if the installment plan simply kept running for its allotted time, the really deceptive part here is the "stay or pay" gun to the chest.

Re:What an idiot

[Jah-Wren Ryel]

Obviously if you are paying for it a month at a time they want you to finish paying before you leave.

Not. What is "obvious" to me is that if there truly wasn't a contract then canceling service would not impact the loan schedule on the phone. If you got a loan to pay for that phone from your local credit union instead of T-mobile, they wouldn't require immediate payment if you canceled service. That right there is proof that the loan is actually a contract for service.

Meanwhile, if someone is in such financial straits that they have to cancel their phone service then having to immediately pay off the balance on their phone loan is a huge deal. It is yet another policy that is abusive to the poor.

But the AG isn't even asking for T-Mobile to change their policies to be less shitty to poor people. All the AG wants is for T-Mobile to fully disclose the fact that the loan schedule is tied to duration of service. That's not being an "idiot" that's doing the bare minimum to insure honest dealing.

Re:What an idiot

[geekoid]

Then don't get the fucking loan.

Seriously, you can't afford the 20 bucks then you shouldn't have a smart phone.

"Else, why the installment in the first place?"
good financial understanding. it's a 0% loan. I can keep the 600 dollars in my bank and use it as leverage for other things, while paying a 0% loan over time.

If you can't understand that, then..well enjoy mediocrity.

"part here is the "stay or pay" gun to the chest."
Gun to the chest? yeah it's exactly the same as killing someone one. way to keep prespective Capt. Mediocre

Re:What an idiot

[The_Wilschon]

You seem to be very worked up about this. Perhaps you should take a few minutes to sit and take some deep breaths.

Let's be completely clear about one thing: The suit in question is NOT alleging, as you seem to be doing, that TMobile's practice here is unfair or unlawful. Instead, the suit is alleging that TMobile has not described their practice adequately in advertisement.

Re:What an idiot

[The_Wilschon]

It's actually much less abusive to the poor than the plans offered by other cell service companies.

With ATT or Verizon, you

• Pay approximately the same amount per month in total as with TMobile (getting service AND a phone), whether you got a "subsidized" phone or not
• Are on the hook for 2 years no matter what (with TMobile, you at least have the option of avoiding any sort of two year commitment -- just don't finance your phone on a two year schedule through TMobile)
• If you decide that you can't afford the service anymore (for instance because you're too poor), you get stuck with an "abusive" early termination fee which never changes amount -- if you cancel after one month, it is the same amount as if you cancel with only one month left. This is in contrast to TMobile, where you can avoid having any sort of two year commitment in the first place, or if you do have such a commitment, the penalty for early leaving decreases steadily to zero over time.

So, all told, it sure looks like TMobile is *substantially less* abusive to the poor than other phone companies.

Re:What an idiot

[Opportunist]

Then don't get the fucking loan.

Seriously, you can't afford the 200 bucks then you shouldn't have a car.

Need I do the rest too?

Re:What an idiot

[hedwards]

OK, but even if you go with the former, they're still claiming that they're the only ones that do that, which is blatantly untrue. Most or all of the other big 3 provide that option and many of the 2nd tier providers do as well.

Bottom line is that the advertisements are deceptive and misleading.

Re:What an idiot

[hedwards]

Pretty much, it's specifically an issue that the WA AG has with the way the advertisements were handled. Seeing one of the advertisements I can see why. There isn't even any fine print involved. They're blatantly making claims which aren't true and not even disclaiming them in fine print.

I generally like T-Mobile because they've shown some willingness to act out of lock step with the other carriers, but in this case it appears that the advertisements needed a lot more information to be included.

Re:What an idiot

[Opportunist]

What actually agitates me, and that's not limited to this article here, is that the quality of "reporting" on /. has been circling the drain for a while now. We get mediocre stories puzzled together from dubious sources that twist said sources around, only to have it twisted and warped out of shape again by the summary.

The summary here makes it sound like the GA has completely lost his marbles 'cause he goes after them just 'cause they want their customers to pay their bills. When you dig through the article and eventually to the original press release, which should have been linked in the first place instead of a source that turns an (actually quite sensibly worded) press release into something that isn't even remotely in the press release.

Then this stuff gets posted to /. and off we go, we can slam the GA of Washington back now, that old man's completely insane, how typically government, too stupid to tie their own laces, going after companies that DARE to want the money for things they sell. 5 car analogies and references to various online services that sell in installments too, we end with the general sentiment that it's business as usual: Government stupid, corporation greedy, but at least we didn't get caught in between them this time. Whew. Ok, next story...

What actually happened here is the GA wanting TM to point out that the moment you cancel your carrier contract with them, the rest of what you owe for your phone is due, and that they can't advertise that anymore in a way that makes you think you can walk away from them any time you please. If you have to get your phone in installments, you probably cannot afford that balloon payment, and hence can't move away, locking you to the provider.

Believe it or not, but (gasp) the GA did something good. (shocked silence filled /.) For the consumer ("how much was the brib... huh? Not some corporation?").

Of course, that's not really a story for /.

Re:What an idiot

[Jah-Wren Ryel]

It's actually much less abusive to the poor than the plans offered by other cell service companies.

Sure, I believe that. In the same way that breaking someone's finger is less abusive than breaking someone's arm.

Re:What an idiot

[Anonymous Coward]

The company that owns my car loan might demand that I pay the whole thing off if I decide to move out of the country. Are they "forcing" me to stay in this country?

Re:What an idiot

[Opportunist]

In a way, yes they do. Can you afford to leave the country?

Of course there are people who'll get their phone on a payment plan because, hey, at 0% interest, why not use it? And if that means I have to pay those 300 bucks I still owe on the phone, I don't care. Here's 300, STFU and cancel my account already!

It's something different if those 300 bucks is actually a lot of money for me. There are people who can deal with paying 40-50 a month for their cell, but instantly coughing up 300 may be a bit steep for them. And these people really only have the choice between staying or somehow loaning those 300 bucks elsewhere. Usually, though, the kind of people who get phones on a payment plan are also the people who already don't get a loan anymore, anywhere.

Re:What an idiot

[aztracker1]

It's called saving, or getting less of a phone... if you can't afford it outright, you should probably wait. A $600 phone (really a $300-400 up-priced) and a $90-140/month plan for two years is a *lot* more than a $100-150 phone on a $50/month plan. It's called living within your means, and people really need to f*ckng figure this out.

Don't get me wrong here, I don't like predatory practices at all, but people need to take responsibility for how they make their purchasing decisions... this isn't anything like the typical company store in the mining towns of the old west. Just like not buying a bigass house with a $3k/month mortgage if you can't really afford it.

Re:What an idiot

[cbhacking]

You can suspend service and keep paying for the phone in installments. They do charge a small fee to keep your number parked if doing this, though.

Re:What an idiot

[TsuruchiBrian]

No there are monthly plans with other providers. I suppose the difference is that the monthly plans on T-Mobile are actually good deals. Where as on other carriers, the monthly plans are bad deals. You are paying almost as much for a monthly plan as a monthly payment on a 2 year service plan. You are basically paying "phone subsidy prices" without even getting a "free" phone.

The only reason you'd do a monthly plan on verizon or AT&T is if knew you only wanted service for a couple months.

On T-Mobile their monthly contract free plan is the "normal" plan they offer now. My monthly bill for my portion of my T-mobile family plan is $32 for voice and unlimited 4G data. Other people on my family plan are paying $22 for voice and 2GB of 4G data.

It's a pretty sweet deal. My Monthly bill for 5 people is $130.month. My girlfriend by herself was paying $90/month at AT&T before she switched.

Re:What an idiot

[pla]

With Verizon, AT&T, or any other carrier you can sign up without a contract, its just that you'll be paying the same price as the guys who took the free/cheap phones.

I, uh, think you might have missed the point of BYOP.

Hint: I don't have much interest in saving Verizon the cost of a phone.

Jus' sayin'.

Re:What an idiot

[Anonymous Coward]

No, because it makes you sound like a goddamn idiot.

Re:What an idiot

[adolf]

That only makes sense if a plan with a paid-in-cash phone really is $50/month, while a subsidized handset is $90-140/month.

But since you seem to have pulled these figures from your rectum, I'll just ignore the rest of what you have to say as well.

Re:What an idiot

[Opportunist]

Care to elaborate why? It's exactly the same situation, just at a different income level.

Re:What an idiot

[Opportunist]

The GA press release sure makes it sound differently:

Consumers who cancel their wireless service face an unanticipated balloon payment for the phone equipment – in some cases higher than termination fees for other wireless carriers depending on how early they cancel. Instead of a “two-year sentence” for wireless service, consumers face a different two-year “sentence” to avoid a lump-sum balloon payment for the phone.

Re:What an idiot

[JakartaDean]

There are two problems with this whole deal. First is something our law calls "reasonable expectation". Now, I don't know if the US have something similar in place, but if not, at least not acting in the spirit of that law makes you a pretty big asshole. The deal here is that when you enter a contract, you have a "reasonable expectation". When I hire a tiler, I do reasonably expect him that he knows how to do it, that he brings his own tools, that he will cover my floor and/or walls in tiles (and not, say, mortadella). Anything that I may "reasonably" expect but is NOT the case has to be explicitly stated and, depending on who are the parties in the contract, may need to be printed out boldly and signed separately, just to be sure it's not hidden somewhere in the legalese bull. When you enter in a deal with a party that advertises something in one way and then it turns out it's exactly the other way around, it's at the very least deceptive.

The other, and bigger, problem is that it's due entirely the moment you decide to leave them. That allows them to force their poorer customers into staying because these people cannot afford to pay off 200+ dollars NOW.

Now, as odd as it may sound, I wouldn't have so much of a problem with the first issue. There's nothing wrong with selling a phone in installments. Cars have been sold that way for decades, why not phones? The problem is rather that people who have to buy a phone on installments are also the same people that can't simply cough up the rest of the amount owed instantly. Else, why the installment in the first place? These people are locked into a contract they can't get out of because they simply cannot afford it. There would nothing be wrong if the installment plan simply kept running for its allotted time, the really deceptive part here is the "stay or pay" gun to the chest.

I confess I don't understand your logic at all. If they were violating the principle of reasonable expectation I would have a big problem with that, but they aren't (read most of the posts here). If they are demanding that you pay the balance due on your loan I don't have a problem with that either. You knew what you were signing up for, they subsidized your goddamn phone (0% interest) and you canceled the revenue stream side of their business. In exchange they asked for you to pay the balance of your loan. You could certainly sell the used phone (according to posts here, they will even buy it back from you) and use that cash to pay off the loan. It's hardly usurious at 0% interest.

From a practical point of view, if you signed up for a $50 / month plan, you are unlikely to have problem raising the $200 remaining. The gun at your chest is a water pistol. If your balance is really only $200 and you walk away, you will not get pursued by goons, but you might suffer a hit to your credit rating -- exactly as you would reasonably expect. I understand about hard times, but I don't see this as being a problem legally, morally or practically. I think it's a case of the USA phone system distorting reality for so long that people no longer understand how things are supposed to work.

I did like the mortadella line.

Re:What an idiot

[Anonymous Coward]

RIght - the plan has no contract; if you're a customer in good standing, you can get a 20 month, zero percent "loan" for the phone - they want you to honor that loan, if you take it. Obviously, if you pay up front, there is nothing to pay back.

Who is it that is complaining about this? The least cost monthly plan around, even with "full price" phone cost factored in.

Re:What an idiot

[aztracker1]

Well, my current play with Simple Mobile is $50/month.. and I was with Boost before that for around the same price... When I looked at handsets/plans for T-Mobile, Sprint, and Verizon... most similar plans were anywhere from $90-140/month from what I was looking at. I got divorced a couple years ago, and decided to switch to prepay through mvno's at that time. Much less expensive, and though I use a higher end smart phone, there are lesser phones available.

If you've actually shopped around comparing the MVNO's (Simple Mobile, Boost, etc) vs. the main carriers with subsidized phones, you'd find my statement pretty accurate, but since you seem to be unable to look into anything on your own, you can take your attitude and shove it back up your rectum.

Re:What an idiot

[Aaden42]

With respect, perhaps poorer customers who can't afford a balloon payment on a $600 smartphone should.. oh.. I don't know.. Not take a $600 smartphone?

I get that having a cell phone has more or less reached the point of necessity to operate as a productive member of society at this point, but a $50 basic "phone" rings just as well as an iPhone. I can't find a whole lot of sympathy for someone who chooses to get financially locked into a service by accepting a loan that's borderline beyond their means.

Re:What an idiot

[Aaden42]

Hardly the same situation. There are relatively few people who could afford to buy any new car for cash. That said, there are options in a car as there are options in a phone. You can spend $51k on a Corvette (tires extra..), or $15k on a Yaris. One of those may be more realistic at a given income level.

For phones, it's entirely possible to get an affordable phone without going into debt. It may not have all the bells & whistles, but it'll make & receive calls. You can get basic unlocked phones on Amazon in the $50 range. Or you can spend $700 for an iPhone.

If you can't afford $50 out of pocket for the phone, I have a hard time seeing how you're going to pay the monthly fee for a smartphone data plan. Make a realistic choice about what you can afford, and you can have a phone no-contract, and no "gun to your chest" for the loan.

I'm willing to admit that having a phone that rings is an important thing for obtaining and maintaining employment. Outside of specialized (higher paying) industries, there's no *way* having a smartphone is a requirement. If you make enough to be able to afford the smartphone, that's great. I love mine, and I'm glad to have a job that lets me afford to have it. If your job doesn't pay enough, that's unfortunate. There are probably more important things to consider going into debt for than a smartphone, particularly given the much larger monthly cost of a data plan to support the thing.

That's not to say that the loan option is automatically bad. I've not read the fine print, but an interest free loan is generally a GoodThing to take, assuming the small print doesn't taketh away what the large print giveth. Odds are the money could be more effectively used if it really is an interest free loan -- even leaving it in an interest baring bank account gives something. Now.. If you could find the phone for cash online cheaper than the "retail" price at the store, then you're probably ahead to buy it out right.

Idiot

[Anonymous Coward]

Washington State AG is an idiot and should learn reading AND comprehension.

Re:Idiot

[Mitreya]

Washington State AG is an idiot and should learn reading AND comprehension.

Bullshit.
You can be "technically" correct, yet absolutely and blatantly misleading (e.g., "unlimited" internet with low download caps, because unlimited refers to hypothetical download speed, not download amount). He is not saying "false advertising", which it is not. He is saying "deceptive advertising", which it is.

Customers are likely to misunderstand the statement, since people often associate "contract" with "pay termination fee" and will quite likely assume no contract means no-termination fee in this case.

Since AG has no power to re-educate all T-Mobile customers, he is trying to block deceptive advertisement, which is certain to mislead at least some people.

Re:Idiot

[Swarley]

There is NO TERMINATION FEE! That's what he meant by idiot. You have to pay back what you borrowed for the phone. That is NOT A FEE. Just because you pay it at termination doesn't make it a termination fee. A termination fee is a price you pay for nothing in return. This price you pay at termination is for the phone that you bought with borrowed money. It's not a fee. And it's not mandatory that you buy a phone with borrowed money or buy one from T-Mobile or buy one at all. You can put a Tmobile sim card into any device you want to. Borrowing money to pay for a device that you can't afford is your own decision. This is not a difficult concept to understand.

Re:Idiot

[waddgodd]

You DO realize this is the same state that Redmond is in, home to the master of the "technically correct but blatantly misleading and probably actually wrong" answer (microsoft), right?

Re:Idiot

[geekoid]

The is no fee for cancelling the service,. You do have the choice to enter into an agreement regarding paying off the phone over time. If you agree to that, then you agree to payoff the loan, and 0% interests and fees at the time you decide to go elsewhere.

T-mobile offers exactly what the advertise. They also offer other services for people who want to pay for a smart phone over time at 0%

It might as well say "Washington AG gets mad becasue company offers service besides what they advertise."

Stupid

[Shatrat]

But, you have the option of buying a phone off newegg or ebay and activating it on a plan with no contract or termination fee. Why WOULDN'T they charge you for the hardware if you haven't paid it off yet?

Re:Stupid

[0racle]

Exactly, there are no early termination fees, there is pay for the hardware you haven't finished paying for yet.

Oh I'm sure that there are no shortage of people that 'didn't realize that' but T-Mobile shouldn't be on the hook for the stupidity of the public.

As a side note, I will probably be switching to T-Mobile this weekend. I am fully aware that if I decide switch to someone else next month, I will need to pay for the phone completely and not over the course of 2 years.

Re:Stupid

[0racle]

Oh and BTW Washington AG, the pay for you phone fee is not hidden, they're very up front about it.

Re:Stupid

[Opportunist]

I don't mind the idea of an installment plan for a phone. I mind them threatening to make it due NOW if you dare to cancel your contract. People who can't pay the whole sum now (like, say, people who'd buy a phone for a few hundred on an installment plan) are FORCED into staying with them because they cannot afford to get out.

Re:Stupid

[0racle]

The 2 year 'contract' IS the cost of the phone. The service plan is month to month. You want to take off? Fine, pay for the part of the phone you haven't paid for yet and we're done. Of course it works the other way too, you want to get the latest cell phone? Pay off your existing one and get a new one whenever you want.

Once again, they are very upfront with this.

Re:Stupid

[Opportunist]

I get kinda tired writing the same things over and over, here's the original press release. I am quite confident you can spot the problem.

Hint: It's not that they want their money. It's that they want it NOW.

Re:Stupid

[Anonymous Coward]

Yo can always pay the balance when you cancel the contract by credit card/line of credit etc. if you can't afford to pay it out all at once.

Re:Stupid

[Anonymous Coward]

People who can't pay the whole sum now (like, say, people who'd buy a phone for a few hundred on an installment plan) are FORCED into staying with them because they cannot afford to get out.

Well, maybe those people should NOT BUY SHIT THEY CAN'T AFFORD.

I absolutely agree that if people were being suckered into this thinking as they signed it that it was a true free lunch -- i.e. that they were receiving an interest-free loan with no strings attached -- and only finding out later, but you seem to be objecting to the terms themselves, even with the presumption that customers are fully informed, and I just don't get that.

Normally, if you want a loan to buy some gadget you can't afford, you expect to pay interest on it -- that's the cost of paying for current goods with future money. In fact (provided your finances aren't completely and ridiculously hosed) you can always get out of the interest-free loan T-mobile offers to their current customers by canceling service, and charging the balance to your credit card, which will then let you pay it back slowly -- but of course they will charge you interest for that service.

If your credit cards are maxed out, AND you don't have cash on hand to cover the balance of payments, AND ebaying your used phone won't get you enough to cover the balance of payments either, how the hell is it T-mobile's fault? If you were on any path towards that situation (even through no fault of your own), what in hell made you say to yourself, "Hey, I should buy a $500 smart phone -- it's on a payment plan, so what could go wrong?"

Re:Stupid

[rsborg]

Oh and BTW Washington AG, the pay for you phone fee is not hidden, they're very up front about it.

He thinks they're hidden because he has his head up his ass (or perhaps Verizon's ass). Kinda hard to see anything from inside there.

Re:Stupid

[0racle]

No shit they want their money now, you're breaking your relationship with them. Pay it and walk away. Try walking away from your mortgage but keeping the house.

Re:Stupid

[Opportunist]

He's not walking away from the mortgage, he's walking away from the contract that he allegedly can cancel any time he wants. He's quite willing to keep the payments going for the whole length it was agreed on, nobody questions that.

I am shocked

[rudy_wayne]

I can't believe that cute girl would do such a thing.

Re:I am shocked

[Anonymous Coward]

Carly Foulkes is no longer actively part of T-Mobile's advertising campaigns.

Which sucks, because I'd sport a serious "cell tower" every time I saw her on TV. (Not a practical configuration for coitus, but, hey!)

Re:I am shocked

[CrashNBrn]

Hah! I thought it was Liv Tyler in the T-Mobile commercials.

Re:I am shocked

[KGIII]

Holy shit, she looks a great deal like my niece. No, she's taken. Not married though but she has way too much baggage and crazy for me to advice pursuit.

Re:I am shocked

[Anonymous Coward]

Bad news dude, the T-Mobile girl is out of contract. Word is she was asking for too much money and they (t-mobile) said "no".

Wha---?

[Anonymous Coward]

Okay, so make them pay the full price upfront. Holding users responsible for the product they buy (even while being nice and letting them pay in installments) is not the same as generating penalty fees and other nonsense for early termination.

It is no-contract *service*

[dgatwood]

It's like buying a carâ"you can buy it with or without a service contract for oil changes, but that doesn't mean you don't have to pay off the loan.

Re:It is no-contract *service*

[Opportunist]

No, but opting to the "with oil" service and later changing your mind doesn't make your loan due in full the moment you decide to go to a different garage.

Re:It is no-contract *service*

[dgatwood]

Yeah, I hadn't learned that little tidbit when I posted that comment. :-)

Re:It is no-contract *service*

[geekoid]

It would if that was the the agreement you made when you bought the car. You can also use those services with a car you own and then you can go to another service station without incurring fees.

You can also get a personal loan, pay for the phone up front. Then you can take the phone and not pay off the loan. Of course with TMobile its a 0% loan, and a personal loan will have higher interest rate.

Re:It is no-contract *service*

[Opportunist]

From the press release that is the base for the article (stress mine):

After an investigation of the company’s practices, the Attorney General’s Office learned that the company failed to adequately disclose that customers who purchase a phone using the 24-month payment plan must carry a wireless service agreement with T-Mobile for the entire 24 months— or pay the full balance owed on phone if they cancel earlier.

Consumers who cancel their wireless service face an unanticipated balloon payment for the phone equipment – in some cases higher than termination fees for other wireless carriers depending on how early they cancel. Instead of a “two-year sentence” for wireless service, consumers face a different two-year “sentence” to avoid a lump-sum balloon payment for the phone.

THAT is the problem. Because it indirectly entraps customers who cannot pay the rest of what they owe instantly, forcing them to stay with TM. Of course, it's an entirely different kind of payment than a cancellation fee, but for the customer, the problem stays the same: He cannot cough up a few 100 bucks now, so he has to stay with his carrier.

No annual cell contract

[0100010001010011]

There is no annual contract for cell phone usage.

There is an annual contract for the cell phone. Or you can pay for your phone on your cell phone with your credit card. Those don't have 'annual fees' (usually) but you still have to pay them off.

what is wrong with that AG ?? huh?

[Anonymous Coward]

Huh? Making them pay back the price of their phone a day after getting a discount on it is totally reasonable! A contract CANCELLATION fee, on the other hand, would be totally wrong if it's supposed to be non-contractual. Or, if they pay full price for a phone or activate their own phone, they shouldn't be charged anything for terminating service. But...geez... a discounted handset... there should be an ever decreasing fee for termination that starts with the difference between retail value and how much the consumer paid for the device.

Does this really surprise anyone?

[Khyber]

I'm not surprised in the least. T-Mobile is too busy scamming people out of their money to think about things like security (celebrity phone hacks) or actually getting a good infrastructure available (one bar in my apartment, the tower is 300 feet away, clear LOS.)

But to be fair, that same tower also carries Verizon, and they get the same service level in my apartment.

Re:Does this really surprise anyone?

[admdrew]

T-Mobile is too busy scamming people out of their money

At least I'm getting scanned out of less money than I was at VZW/ATT.

Re:Does this really surprise anyone?

[hedwards]

And that's sort of the point. T-Mobile might not be great, but it's less not great than most of the competitors.

Personally I'm likely to go with somebody like Sprint or Credomobile next time I need a new phone as they seem to be in less of a position to screw me over than the larger carriers. Plus, I found that Sprint coverage around here was by and large pretty reliable compared with Spotty AT&T coverage.

Re:Does this really surprise anyone?

[rickb928]

"(one bar in my apartment, the tower is 300 feet away, clear LOS.)"

Another anecdotal complaint about service at a specific location.

Whatever the reason, don't you get it? Cell service is imperfect.You can find similar stories for E V E R Y carrier in your area. So if this is a problem that compels you to change carriers, you'll be changing to landlines.

Sorry, but such stories bespeak the sheer ignorance of the complaintant. It's not useful. Let it go, or move out of your brokeass apartment and choose to live where you get the features you desire, like sunshine and cell service. Sheesh, didn't you check before you signed the lease?

Re:Does this really surprise anyone?

[Tough Love]

I'm not surprised in the least. T-Mobile is too busy scamming people out of their money to think about things like security (celebrity phone hacks) or actually getting a good infrastructure available (one bar in my apartment, the tower is 300 feet away, clear LOS.)

But to be fair, that same tower also carries Verizon, and they get the same service level in my apartment.

Security happens in your phone. To depend on the carrier for anything beyond delivering the signal and keeping your registration info private is just naive. As far as infrastructure goes... it's true, in the past T-Mobile has suffered somewhat on the cell tower side but has improved lately. The last noticeable issue I had compared to other carriers was a couple of years ago.

Re:Does this really surprise anyone?

[anagama]

Well, there's always voice over WiFi, something that allows my TMobile phone to work even in places nobody covers.

Re:Does this really surprise anyone?

[geekoid]

TMobile is great.
There service in the 12 or so years I have been with them has always been exceptional. The last time I went to upgrade my phone(Nexus 4), they found a better plan without me asking He just said "Did you know we offer this plan, it gets you 4g, and based on you usage you won't exceed the minute...and it has unlimited texts." I walked out with a new phone, and a 60 dollar drop in my monthly rate, and that includes the 20 a month for the phone. 0% loan? sign me up.

I literally can no imagine better customer services. within reason, natch.

Re:Does this really surprise anyone?

[Khyber]

"Another anecdotal complaint about service at a specific location."

Oh, look, another person that makes a complaint about an anecdote yet can't provide anything much more concrete than what I've said.

You're talking to someone that has worked on and built shortwave, FM, AM, VHF and UHF antennas, and is currently making one for a remote-controlled LED grow light, which shall operate in the 900MHz band.

I know what I'm doing, and I know that what's happening should not be happening at all. It could be part of their equipment has gone bad, it could be a poor connection to the antenna from the base, it could even be interference from possible unlicensed broadcasts, or it could be a bad ground loop making things quirky, but until it totally dies and customers can't access it period, they'll never fix it.

And that specific location, is at the base of a mountain. The antenna tower is above me, with multiple antennas pointed downwards and outwards to ensure coverage directly below the tower.

It's not just my handset, either. Everyone in or around this antenna has garbage reception. As soon as we get near the freeway, the signal pops right back up to near-maximum. Even the public wi-fi coming off the same tower has this issue.

Regardless, the tower itself belongs to T-Mobile, and it should be on them to fix it, considering this is affecting every service on that tower.

Re:Does this really surprise anyone?

[Khyber]

The hacking done in the case I'm mentioning involved a non-smartphone. The newer ones you read about today are all involving smartphones. This was on some Nokia handset or something.

Re:Does this really surprise anyone?

[rickb928]

So you understand. Good.

Re:Does this really surprise anyone?

[Anonymous Coward]

Except that with many carriers they're providing an often outdated and quickly unmaintained non-standard version of Android, often on top of the phone manufacturer's often outdated and quickly unmaintained custom ROM for their handsets "differentiating features".

Re:Does this really surprise anyone?

[Khyber]

Yes, I understand. I understand well more than I think you possibly know. (Hint, global research.)

What a silly thing to complain about

[93 Escort Wagon]

T-Mobile is offering consumers the ability to pay for the phone over time - at the same overall cost as if they paid up front - and my state's AG is complaining that they are requiring you still pay for the phone if you walk away from their phone service.

My tax dollars at work, ladies and gentlemen. Since a recent past AG (Gregoire) became governor, I imagine this guy has political aspirations as well and is looking for resume padding he can offer up come election season.

Re:What a silly thing to complain about

[martas]

Seriously, instead of going after some of the truly egregious scams consumers face these days (pharma advertising, hello??), he picked a completely reasonable advertisement claim that you'd have to be a complete moron to misunderstand. Way to be on the little guy's side, Bob Ferguson.

Re:What a silly thing to complain about

[phorm]

So which competing Telco passed him a big wad of bills recently?

Re:What a silly thing to complain about

[Anonymous Coward]

Exactly. The service plan does NOT have a contract. If you choose to spread out the payments for the phone itself, then that will obviously have a contract, but that's a contract for the purchase of the phone itself, no different than any other deferred payment plan. If you want, you can pay for the phone upfront and not have any contract at all.

Re:What a silly thing to complain about

[Andrio]

Yeah, exactly.

T-Mobile, in effect, didn't change anything by starting this "No contract" campaign. Things still work the same. The key difference is after the two year subsidy is paid off, your phone bill goes down. This is in contrast to the other carriers, who keep charging the exact same even after the phone has been paid off.

So really, this whole thing is just a way for T-Mobile to easily communicate that advantage to the customers, because most of them never think about their bill paying for the phone subsidy.

Re:What a silly thing to complain about

[Anonymous Coward]

T-Mobile has a no contract option. People that opt to finance their phone just didn't choose it.

Re:What a silly thing to complain about

[geek]

Mark my words, AT&T and/or Verizon put this AG up to it. We can't have that pesky competition stuff going on.

Re:What a silly thing to complain about

[Anonymous Coward]

Also, if you get a cheap phone, your bill is lower the whole time.

For example, and HTC One S is $5/month less than an HTC One, AND only $9.99 down (the cheapest of what I'd call a high-end phone they offer).

A nexus 4 is $3 less/month, and $50.00, some phones are free and $15 less/month.

When I go to Verizon I see varying amount of subsidy depending on the phone's price.

Re:What a silly thing to complain about

[Opportunist]

Unless I'm seriously mistaken here, it seems that the rest of the amount you owe for the phone is due instantly and in full the moment you cancel your contract. Which means that people who cannot afford to pay the whole sum right now (like, say, people who can't simply buy a phone but have to turn to options where you can pay it over time) are locked into their phone service provider contract because they cannot afford to get out of it. Sure, they could cancel it any time without cancellation fee, but at the same time they'd have to pay back the rest of the phone. Can't pay the phone, can't get out of your phone contract.

That is the deceptive part.

Re:What a silly thing to complain about

[tlhIngan]

T-Mobile is offering consumers the ability to pay for the phone over time - at the same overall cost as if they paid up front - and my state's AG is complaining that they are requiring you still pay for the phone if you walk away from their phone service.

No, the problem is that you can opt for the phone loan/financing. The problem is the financing is tied to the service - cancel your service, your loan is called in. If it was truly separate, you could still cancel the service (it's no contract, after all), but you'd still be responsible for the phone payments. Which if it wasn't tied to the service, means you can still spend the rest of the time paying off a phone that has no service.

This can be useful if you need to discontinue service for a little while but plan on reconnecting it later. The problem is when you disconnect, your phone loan becomes due. It's not possible to cancel your "no contract" service without affecting the contract loan payment plan, effectively making the no contract service part of the contract.

So it's not that you separately finance a phone and get service separately - if you finance a phone, service is mandatory and calling the service "no contract" is correct technically, but the contract of your phone financing makes the "no contract" plan part of the contract.

Re:What a silly thing to complain about

[Anonymous Coward]

> T-Mobile is offering consumers the ability to pay for the phone over time

In the legal realm, such an arrangement is called a CONTRACT.

Re:What a silly thing to complain about

[geek]

So it's not that you separately finance a phone and get service separately - if you finance a phone, service is mandatory and calling the service "no contract" is correct technically, but the contract of your phone financing makes the "no contract" plan part of the contract.

Simple solution. Pay for the phone upfront using a credit card. Cancel the service any time you like and pay for the phone as long as you like on your card. This stuff isn't rocket science.

Re:What a silly thing to complain about

[Anonymous Coward]

This sounds cool. I'm canceling my AT&T phone and getting T-Mobile now.

Thanks for the information and the judge and if it was AT&T or Verizon, Thanks!!

Re:What a silly thing to complain about

[Anonymous Coward]

Jay Inslee is the governor of Washington State. AGs have political aspirations in every state, and it's not new.

Re:What a silly thing to complain about

[aztracker1]

Or *gasp* make due with a lesser phone on a less expensive mvno for a few months, and save the difference to get the phone you really want outright...

Re:What a silly thing to complain about

[KGIII]

Which is different than a SERVICE CONTRACT.

See? I can use the shift key too.

Re:What a silly thing to complain about

[cbhacking]

Except... it is actually possible to do what you say. You can suspend your number (technically distinct from canceling mostly in that the number remains parked, which they will charge a nominal fee for) and continue paying the phone installments. When you want service again, just tell them to re-enable it.

That said, this doesn't allow for switching your number to another carrier (temporarily or permanently) and staying on the installment plan. Given that it's a zero-interest loan, that doesn't hugely surprise me, but I do now agree that it's not as well advertised as it should be.

Re:What a silly thing to complain about

[Anonymous Coward]

i guess he's looking forward to campaign contributions from either atnt or verizon

Re:What a silly thing to complain about

[pla]

Can't pay the phone, can't get out of your phone contract.

Can't pay for the phone - Don't fucking buy it

Oh, sorry, I forgot that Slashdot had gone full-Liberal in the past few years. Carry on ranting about the evilness of someone forcing you to honor terms you agreed to.

Re:What a silly thing to complain about

[Anonymous Coward]

if they don;t pay for the phone wouldn't that be stealing?

Re:What a silly thing to complain about

[tjhart85]

I agree with you that this is stupid, but your point is kinda flawed.

If the people this is attempting to 'defend' had access to a credit card, they'd just throw the remainder of their cell phone balance on there too and call it a day, with the benefit of enjoying the 0% financing with TMO for as long as it lasted.

To get away from the point you made slightly: If TMO had made the contract so if you had service with them it was 0% financing, but if you left it would be 10% people would still be complaining that they should offer free financing no matter what.

Seriously though, If people can't afford the cost of $300 potentially coming up and biting them in the ass, they shouldn't have gotten a $600 phone. They should have gone on ebay or craigslist & bought a used phone. I've known plenty of people who picked up last years model at a steal shortly after the new model came out. This way you wouldn't have had to sign a loan with dodgy (in the view of the WA AG) requirements and could enjoy their cheap service for as long as it was worth it to you.

I'm missing the deception

[dirk]

I don't see how they are being deceptive. There is no contract for their service. If you want to do financing for a phone through them, there is an agreement for that, but that is something entirely different and not required at all. I can go in there and get cell phone service and not sign a contract. I can even get cell phone coverage and buy a phone from them (outright) without a contract. But if I want to take advantage of their financing for phones, then of course I need to have some type of agreement about that. I don't need a contract to by something at Best Buy, but if I want to use their financing then I have to. That isn't false advertising, that is them offering additional services that I can take or leave.

Re:I'm missing the deception

[Opportunist]

From TFA:

The Attorney General’s office confirmed that T-Mobile has signed an Assurance of Discontinuance in which it agreed to stop “misrepresenting that customers can obtain wireless service and telephone equipment without restrictions,” and it will no longer fail to ”disclose that customers who terminate their T-Mobile wireless service before their device is paid off will have to pay the balance due on the phone at the time of cancellation.”

The important part here is that the phone is due in full the moment you cancel, and that they didn't really point that out strongly enough. Because this can easily lock people into their "non-contract" with TM as the phone carrier if they can't afford to pay off their phone in full immediately.

Re:I'm missing the deception

[pla]

I don't see how they are being deceptive.

See, some people want something for nothing. And they've so deluded themselves into believing that such a deal exists (what with all the free money those taxpaying suckers keep sending them via the government), that when it turns out the whole world doesn't work that way, they go crying about unfairness to anyone who will listen.

On the other side of the spit-proof plexiglass window, Attorneys general will whore themselves out to whatever cause will get them the most votes when they run for a "real" office in a few more years. And the world has a hell of a lot of poor people whining about the unfairness of having to pay for products and services actually provided.

Sounds like a match made in heaven, eh?


Upshot: Always get cash up-front.

I wonder....

[waddgodd]

I guess the "no contracts" thing would be true if you could stop service and just paythe phone installment monthly charge, because you're not paying a service contract at all, rather you're buying a phone on time payments, and part and parcel with time payments is if you stop paying the time payments, you owe for the whole purchase price. IANAL, don't try this at home, etc etc

Re:I wonder....

[TsuruchiBrian]

I think you can do that.

Re:I wonder....

[turp182]

I'm sure there's a clause in the phone purchase contract that says the balance is due if coverage is canclled. It sounds like it's a 0% interest loan (sum of payments = cost of the phone). They lose all "business" interest in you if you cancel their coverage. Why should you get a free loan? Maybe they could rework the contract and have the phone contract become a 20% interest rate loan? At that point they have a vested interest in the consumer, and 20% isn't unreasonable these days (for debt, certainly not for savings...).

They'll just make this more clear and be done with it.

It would be comical if this came anywhere near count. Except that court is expensive for all parties, and I don't think the AG has a leg to stand on, not that I would know.

WHAT!!?!?

[AtomicDevice]

You mean to tell me that T-Mobile isn't selling smartphones for the low-low price of a single month of their cheapest plan?!!?!? THAT'S A RIDICULOUS ASSAULT ON MY RIGHTS AND INTERNET PRIVACY AND STUFF!!!

Really? Who cares about this?

Bogus Story

[Anonymous Coward]

T-Mobile's new plan is the least deceptive, most transparent plans in the entire business. Instead of the hundreds of confusing competing plans offered by their competitors which bundle service with a phone subsidy, T-Mobile has decided to have one, and only one plan -- it costs $50 a month for unlimited talk, text, and internet, with no contract. You can also add a payment plan for a phone, with terms spelled out in detail for each phone model.

T-Mobile is offering a simple, transparent plan, amid a sea of confusing opaque plans offered by the competitors. And, they've already agreed to change their advertising to make it even more transparent.

This story is just the editors posting a bogus troll to churn up page hits.

Re:Bogus Story

[Opportunist]

The problem was simply that it was not easy to see that you have to pay your phone in full the moment you move away. They changed that part to be more transparent now, and I guess now nobody has a problem with it anymore.

They even offered to take back the contracts signed so far at no fee and with no charge. I'm actually willing to chalk that one off as "honest mistake".

Moronic

[Anonymous Coward]

There is no contract, and no shenanigans.

There is no contract for the service. However, they do offer a payment plan for your phone if you don't want to pay for it 100% up front.

Just because you cancel your service doesn't mean you don't have to finish paying for the phone you bought on a totally separate payment plan.

Where is Washinton?

[Splitterside]

Never been to Washinton before.

Re:Where is Washinton?

[Anonymous Coward]

Never been to Washinton before.

It's next to Idontknow and O'Reagan

Re:Where is Washinton?

[Anonymous Coward]

It is where southern congressmen hang out between rounds of golf.

Re:Where is Washinton?

[guttentag]

It's north of Oreon. Slashdot is running short on the Gs today. That's why they otta run the slashverts, yo. You want your Gs with your headlines, otta watch the slashvertisements. Timothy otta et paid or someone be droppin the Gs!

It's a political story

[SSpade]

One that says much more about Bob Ferguson than it does T-Mobile.

Re:It's a political story

[Opportunist]

I was pondering something along the lines of that.

I mean, yes, ok, you could call it deceptive the way they set up the contract, in such a way that they could entrap poorer customers. But they offered to take back the phones already sold, cancel the contracts signed at no fee, yet still continue offering the product, so that entrapment was most likely not intentional. Also, knowing a bit of the problems with lower income customers, you don't really want them as cell providers. They cause a lot of trouble in your service and billing department.

Still, there are WAY bigger fish to fry than this petty problem. Maybe they latched onto it because they felt that TM indeed made a mistake here and they can easily use it as a "see, we're doing something!" without stepping on anyone's toes.

Re:It's a political story

[FatLittleMonkey]

I mean, yes, ok, you could call it deceptive the way they set up the contract,

You could, but you'd be lying.

Re:Slashdot staff -- stop the abuse or be sued...

[Anonymous Coward]

wow!! I think Slashdot should impose a message size limit. This troll posted a ridiculously long posting, far greater than the largest normal post I've ever seen. What do you think?

Re:Slashdot staff -- stop the abuse or be sued...

[Anonymous Coward]

That's nothing, this one looks about three to five times shorter than usual. Maybe Slashdot are doing something after all.

But it's still not enough to block this apk asshole. What's really funny is the "geek angst" part of his rant, as if his own abuse of Slashdot wasn't geek angst at all. What a douchebag.

They made me sign a contract recently

[bobjr94]

I recently (after they came out with the no contract ads) added a 3rd line to my account (an older phone I owned outright) and I still had to sign a damn 2 year contract on that line, even though I provided my own hardware. And their ads didnt tell the truth either, they said add another phone to your account for only $5 a month. It was actually $15 a month, for $5 a month the new line did not include the use of any data or texting services, current on my plan. You had to pay extra to be able to use your data you already paid for. Another lie, unlimited 4G data, it says in the contracts unlimited upto your plans GB rating, then your speed is reduced to 2G data speeds.

Re:They made me sign a contract recently

[Tough Love]

Go prepaid with automatic pay.

Re:They made me sign a contract recently

[Anonymous Coward]

You added a 3rd line to your already existing account, which is probably the older contract-style plan. Since you don't have a non-contract plan, I'm not sure what your bitching about. If you sign up for a brand-new account, it would be prepaid. But your already in existence account is probably under contract, so anything you do to it will follow the older rules.

It's not that hard to figure out.

Re:They made me sign a contract recently

[Anonymous Coward]

At least with the Data, $20 gets you either unlimited, no tethering, or 4.5 GB with tethering (2g no overage after that), unless they changed the plan, but yes, the add a line for $5 is deceptive.

The're site is pretty clear though.

http://www.t-mobile.com/shop/phones/default.aspx?capcode=AGE

Re:They made me sign a contract recently

[geek]

They "made you?" You might wanna call the cops, carriers shouldnt be allowed to put a gun to your head like that.

Re:They made me sign a contract recently

[Anonymous Coward]

The contract issue was just an incompetent representative. I upgraded phone and plan and still had 11 months on my existing contract. At first the guy thought that since I was under contract I needed to up it to another 2 years, but when I said "really?" he asked someone else and was told no, the existing contract had to run it's duration but no longer than that.
I don't know about the $5 vs $15 per extra line.
They do have an unlimited 4G plan, for $20/line. They also have two other data plans that are clearly described as 500MB or 2GB of high speed data which is then throttled to 2G speed. No lies there.

Re:They made me sign a contract recently

[gl4ss]

you should have just gotten a new number instead of riding it on your existing rape plan.

(I don't find it strange that you have to pay for data and such per sim, unless you're getting a clone sim that you can't use at the same time with your other..)

the "no contract" is for the phone service...

[girlinatrainingbra]

The "no contract" portion is for the pay-as-you go cellular phone service. The "contract" portion, which some people may choose to utilize is for paying for a telephone over time with multiple payments spread out over some months to years. That "contract" portion is not needed if you bring your own phone. Perhaps if T-Mobile were more explicit in their ads saying No contract if you bring your own phone to the game. Otherwise, still no contract for the monthly service, just a contract to buy the phone over time but with that cost explicitly stated instead of hidden and bundled into the monthly telephone+cell-service contract

I can see how people might get tricked or confused, but that's only if they don't have a brain. And I think, IMHO, that this particular AG has demonstrated that either he does NOT have a brain or that the one he has is not functioning as well as he believes it does. Hmmm... low brain activity... does this automatically qualify him for a congressional political run? ;>)

Re:the "no contract" is for the phone service...

[gnasher719]

I can see how people might get tricked or confused, but that's only if they don't have a brain.

Actually, I had seen their website and hadn't noticed that you are supposed to pay the rest of your loan for the device _immediately_ if you cancelled the service contract. Not that it makes a big difference; it is common sense that you have to pay the money anyway, the only difference is that you have to pay in one lump sum instead of over the remaining number of months. And since T-mobile offers no-contract service (I think it is actually a one month contract), it should be easy to find a buyer for your phone.

What I find annoying is how difficult it is to find out what the actual terms are. For example, I tried to find out what actually happens when you have a contract with O2 in the UK, and you exceed your data limit. It's impossible to find out. T-mobile is very clear: On the cheapest contract for example you get 500 MB of very fast data per month, and after that an unlimited amount of very slow data. No extra payment, no matter how much you use. On O2, I checked it, and it was impossible to find out.

no, they're complaining about the ads

[Chirs]

They're complaining that the advertising claims there is no contract, when in fact there is still a contract about the phone....just not the cell service.

All they have to do is update the advertising to make it clear that the money is still owing on the phone--which is just common sense in any case.

Re:no, they're complaining about the ads

[LordVader717]

The advertising just says there is no annual service contract, and that you can use your existing phone. If they were advertising a new phone for free with no future payments there might be a problem, but they didn't do that.

No you can't

[Anonymous Coward]

Try sprint. Even if out of contract and paying month to month, ANY change to your service and they FORCE you into a two year contract. Even if your phone is totally paid for. Terminate early and get an early termination fee.

ALL carriers suck

[Tablizer]

Oligopolies almost always have shitty service, period. You need at least about 7 companies competing to create real competition and real choice.

However, oligopolies have the pocket power to lobby heavily against anti-trust.

This isn't deceptive at all

[DavidinAla]

All T-Mobile has done is separate the cost of the phone from the cost of the service. You can quit using the service at any time, but you still have to finish paying for the hardware you've purchased. How is that deceptive?

Re:This isn't deceptive at all

[Anonymous Coward]

I thought the same, and it's easy to miss, but buried in the article:

The problem is this:

If you cancel your service plan, the balance on your phone loan becomes due in full, immediately. You don't get to keep making the $20/mo payments on the phone.

Re:This isn't deceptive at all

[Anonymous Coward]

Oh come on now, how do you expect me to use a phone that doesn't have service! The phone is worthless now therefore, I shouldn't have to pay for it anymore. /Just work one day in a billing queue at a call center and you'll see..

Re:This isn't deceptive at all

[Anonymous Coward]

Agreed. Why is this so unclear to so many people. Perhaps they are the parasitic types who are always out to get something for nothing?

Re:This isn't deceptive at all

[aklinux]

I'm with you. I fail to see what these guys are complaining about. Did they foolishly believe that 'No Contract' meant they were going to get their $500-$700 for phone for free. It needs to get paid for somewhere.

Idiocracy

[Tough Love]

The termination charge is for the phone purchase, not the service contract. Are civil servants specially bred for this elite class of idiocy, or is part of their cerebral cortex normally removed as part of the interview?

Re:Idiocracy

[Tough Love]

The termination charge is for the phone purchase, not the service contract. Are civil servants specially bred for this elite class of idiocy, or is part of their cerebral cortex normally removed as part of the interview?

Wow, I detected a civil servant with mod points. Look if you don't want to be thought of like that then don't do this shit.

It Would Be Nice...

[Anonymous Coward]

It would be nice if he also made an effort to enforce the definition of the word "unlimited" against all of the carriers.

Handset financing, not service contract

[Todd Knarr]

My understanding is that if you just buy phone service there's no early termination fees at all. That "early termination" fee only comes into play if you buy a handset at the same time and elect to pay for the handset in installments. In that case they'll include the installment payment for the handset on your bill each month as a separate charge, and if you terminate service you're responsible for paying off the balance of the contract for the handset. But that's hardly deceptive, I mean when was the last time you financed something and could just walk away from the contract early without paying off the remaining balance? The only thing unusual here is that there isn't an option for continuing to pay the installment contract for the handset when you don't have phone service and so aren't getting a regular monthly bill. The AG might be able to make a case for tying the handset payment contract to continuing phone service, but I hardly found the terms of the deal deceptive and certainly not hard to understand.

Liar

[Anonymous Coward]

You're full of shit. T-Mobile no longer offers any kind of contract at all.

Here's what their site says

[turp182]

Act like you are shopping, select a plan and then a page with phones comes up.

The first one is $99 for an iPhone 5 - 16gb. But, the not so small print says:
Qualifying rate plan required.SRP $579.99. 0% APR On Approved Credit for well-qualified buyer. Device loan balance due on service cancellation.

Every phone has the same text, with the price for that phone.

Due diligence done.

I wonder if they added that small print today???

Re:Here's what their site says

[CanHasDIY]

Personally, I find it a bit mind-blowing that we have to finance goddamn cell phones.

Then again, the Nexus 4 works on T-Mobile, and it's less than 300 Big Boys...

Why would anyone finance a phone again?

Re:Here's what their site says

[damnbunni]

I could have paid for my first T-Mo phone up front, but since they were offering 0% financing, I took it. The rate was still reasonable even with the phone payment included, so why not?

(This was a few years ago, and they were calling it the Even More Plus plan. What pissed ME off is that Microsoft turned off the Sidekick servers before I was done paying for the thing, so for two months I was making payments on a useless brick. However, I'd have been screwed by that no matter when I'd paid for the phone.)

Re:Here's what their site says

[neminem]

Because they make you? Or because it's still cheaper?

I bought a refurb phone for 75$ (and got a 50 dollar credit for signing up, so I really got it for 25$). But I don't think it would've been nearly so easy to do that at any other phone provider than Ting (and sadly, few people have still heard of Ting. Then again, that's probably why their service is so good, because they *don't* have millions of customers.)

I know... right?

[RandomUsername99]

A *regular phone company* has a legally binding, written agreement, which a contract, that you sign, guaranteeing that you will reimburse the phone company for their expenses, primarily your phone, if you stop the service early.

What *T-Mobile* has is a legally binding, written agreement, which is NOT a contract, that you sign, guaranteeing that you will reimburse the phone company for the expense of your phone, if you stop the service early.

So, I think people who are saying that this is different from other cell phone company contracts are clearly telling the truth... not in the standard sense, where everything they say is indisputably correct... rather, in the t-mobile sense, where the "true" part is judged solely on whether or not it's true that they expressed something, and the actual veracity of their words is conveniently ignored for marketing purposes.

Better analogy: TV

[Anonymous Coward]

A better analogy is cable TV. Most people buy a TV then subscribe to a cable service, keep the TV or the service for as long or as little as you like. Don't have the cash to buy a TV? Put it on your CC or get one through a separate rent-to-own company. That's the way it's been done for ages and has not been a problem in any way, so I just don't understand why people insist on doing things differently with cellphones. Cost wise they're very similar too.

Truth in advertising

[foreverdisillusioned]

Wow, a lot of people defending T-Mobile here. How about a little strict enforcement of "truth in advertising" here? If they say "no contract" and there is indeed a contract, that's screwed up. It is / should be the advertiser's responsibility to be truthful, not the consumer's responsibility to figure out what they 'really meant.'

The general public has had carrier subsidized phones for over 10+ years with most of them not even realizing it. T-Mobile should be required to say "no contract if you buy or bring your own phone" or at least "'no contract' offer is for service only." This is even more egregious if they do not allow people to return their cell phones in lieu of paying them off.

Re:Truth in advertising

[foreverdisillusioned]

p.s. I thoroughly applaud T-Mobile not forcing us all to pay for phone upgrades every other year (whether we want to or not), I just don't think that gives them a free pass to tell lies.

Re:Truth in advertising

[KGIII]

I'm not entirely sure but I believe every ad I've seen from them (concerning this, of course) has clearly stated it as this, "no service contract." I think that's good enough but it seems that I hold myself to a higher standard than this AG does.

some element of truth

[Chirs]

It would have been better to have the phone contract be separate from the service contract, so you could cancel the service contract and continue to pay off the phone at X dollars/month.

But to do that they'd probably need to charge interest on the outstanding phone balance to make up for their own opportunity cost.

Re:some element of truth

[Opportunist]

Where's the profit for TM in such a case? We finance your phone so you can take it and use a different carrier?

Phone carriers may be a lot. They usually have a really bad reputation, and usually it's well earned. And they are known for a few bad "qualities".

But one bad quality they sure as hell don't have:

Stupidity.

Dumb

[Anonymous Coward]

So it's fine if they want to limit unlimited data plans but you make someone sign a contract to continue paying for something until it's paid off and suddenly there is deceptive marketing? Fucking stupid.

In the pocket

[mauriceh]

It would appear that Mr. Ferguson is either a shill for the big telcos, or an idiot.

I hope T-Mobile have the guts to sue him personally for this.

Re:It's a politician story

[John.Banister]

It also says something about what you get when Attorney General is an elected position.

Security updates

[tepples]

Last point, if you buy a phone with decent specs and build quality, it's going to outlast the repayment term. When I bought my last phone, I got an [Android]

But will the availability of security updates "outlast the repayment term"?

Re:Security updates

[mrchaotica]

If you buy a good phone it'll be supported by Cyanogenmod, so yes. Or if you buy a Google Nexus, yes (hopefully).

Can't cancel one and not the other

[tepples]

The problem is that you can't cancel just voice, texting, and Internet, and keep paying per month on the phone itself. Once you cancel voice, texting, and Internet, T-Mobile cancels the phone installment plan for you, making the entire balance due and payable immediately.

Re:Can't cancel one and not the other

[Swarley]

Exactly. The balance due on the phone which you still own. That's not a fee. That's paying for something that you bought and get to keep. The only reason they cancel the phone installment plan immediately is because the terms of the loan are so generous in the first place that it's not viable to let people keep those terms when they aren't paying you otherwise anymore.

When Blockbuster did that

[rsilvergun]

the 'giant' late fee was you buying the DVD for what it would cost from the 'pre-viewed' bin. I bought several Scooby doo dvds for my kid that way. It was the one thing they did that I actually liked.

Law is an ass. But this AG is a bigger one.

[140Mandak262Jamuna]

What part of pay all remaining installmenst before you leave he does not get? May be he is in the pocket of AT&T and Verizon who just want to some FUD.

In other words...

[Torodung]

sign an agreement that makes them responsible for the full cost of their handsets should they cancel service prematurely

Hmm, sign an agreement, for the consideration of a subsidy in the purchase of your phone. What do we call that in contracts 501?

contract 1) n. an agreement with specific terms between two or more persons or entities in which there is a promise to do something in return for a valuable benefit known as consideration.

It's a freaking contract. At best it's just technically not a term of the official "service contract." It's a term of a "purchasing contract." Wow. Hope T-Mobile gets fined for this. They are bald faced liars.

Wish they'd do that with Century Link

[Anonymous Coward]

They kept sending me junk mail and airing commercials claiming "High speed internet" for only $19.95 a month. So I called them and found that to get something similar to what I'm getting via cable it was closer to $75 a month. Of course, I'd also get a landline phone that I don't want. I've been landline-free for 10 years and don't even have a non-cellphone anymore.

I don't get all the vitriol. . .

[Anonymous Coward]

T-Mobile is somewhere between the big carriers - Verizon, AT&T, and Sprint, and the bargain basement just about only month to month little carriers that ride on somebody else's service. They're generally considered a "big" carrier.

I don't know about Sprint, but traditionally with both Sprint AND AT&T you're stuck with a contract, a subsidized phone, early termination fees, and an often times confusing array of potential pitfalls if you want to change your service in any way, try to reduce the bills for your service, etc. Not only that, but there is *NO* reduction in the rate you pay with these carriers once you've paid off the phone.

T-Mobile's *service* is no contract. I brought my own phone, I didn't pay as much as somebody who got one of these phone loans. Later, when I saw the pretty awesome price for the Nexus 4 - at the time - I bought that outright. I was able to change to a plan that had unlimited internet for anywhere from $20-$40. This is not quite the "grandfathered" in unlimited - it's more along the lines of the current "definition" most carriers are using for unlimited with one important distinction - once you've hit the data cap for your plan you aren't charged more per megabyte, you get reduced in speed.

Even the loan contract is a heck of a lot more forgiving than most carrier's plans - and this is a contract. If you terminate early, you pay for the phone. If you *don't* terminate early, then until you purchase a new phone you pay less. This is built into the *loan*, not the phone service.

I *haven't* seen the add, so I don't know how much they imply you get the service AND the phone with no contract, but a phone is *not* part of the plan. If they outright state that getting the loan for the phone comes with no contract, then that's a legitimate gripe.

Arguments about their service quality - both customer service and actual gaps in their cell service are legitimate grips. I *may* be implied that you're getting a better deal then when you get to the website or the store - but I'd bet that's because most consumers have come to expect a phone with their service. When you go to a carrier who allows you to bring your own phone, it should be implied that the phone and the service are two separate things - as they *SHOULD* be.

Re:I don't get all the vitriol. . .

[Anonymous Coward]

Whoops, not logged in, can't edit. That's $20 to $40 less expensive than Verizon or AT&T's plans.

Also, I think at the time there wasn't a phone loan, it was a 2 year contract subsidized phone. Not sure what happened once the contract was up and you'd *paid* for the phone with one of those contracts. I like that it's clear that your phone rate DROPS once you've paid off the phone.

You

[Anonymous Coward]

You can even sell your phone on ebay to try to recoup some of the costs if you don't want it anymore. Home

AG has nothing better to do?

[ethanms]

“As Attorney General, my job is to defend consumers, ensure truth in advertising, and make sure all businesses are playing by the rules,” Ferguson said in a statement. “My office identified that T-Mobile was failing to disclose a critical component of their new plan to consumers, and we acted quickly to stop this practice and protect consumers across the country from harm.”

Of all the things to harp on... makes you wonder what impact Verizon and AT&T lobbyists might have had on this...

The distinction is fairly clear... the "No Contract" refers to the cell phone service. Of course if you buy the hardware on credit then you are expected to fulfill your agreed payments--all of which is part of a credit contract.

I wonder if all they'll need to do is start saying "No Contract for Service" or something idiotic like that.

Given all the BS we've seen come from VZ and AT&T when it comes to claims of fastest network, most reliable, 4G vs. not, "unlimited", etc... you'd think the AG would have better things to do.

T-Mobile is a Much Better Deal

[Anonymous Coward]

Considering Apple sells the low end iPhone 5 for $649 without a contract and the total cost from T-Mobile over 2 years for the phone is $579 then you get a discount from T-Mobile so you win by gaining time value of money over the 2 year loan and get a net discount and cheaper service per month. That is a Win-Win-Win.

Deceptive ads.

[Anonymous Coward]

I had trouble for years with T-Mobile. They are the worlds worst.