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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 ..."
Yeah, that car I just bought? I'd like to cancel that payment stuff and just keep the car.
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?
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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.
The Kruger Dunning explains most post on
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.
#DeleteChrome
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.
There are 0x40000000 types of people: those who understand 32-bit IEEE 754 floating point, and those who don't.
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.
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.
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.
retrorocket.o not found, launch anyway?
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.
Constitutional rights may be respected, repealed, or modified; but they must never be ignored.