T-Mobile nailed for deceptive advertising

T-Mobile’s new contract-free offerings may not be all they seem. The carrier settled a lawsuit last week after allegations of deceptive advertising surfaced relating to their no-contract wireless plans.

Those plans, says the Washington State Attorney General, contained hidden early termination fees for those who purchased on a two-year payment plan. T-Mobile had advertised that none of its new offerings required consumers “serve a two-year sentence.”

“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,” stated an Attorney General press release.

“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.”

T-Mobile will have to reimburse the AG’s office for over $26,000 in costs, and consumers who purchased T-Mobile service and equipment between March 26 and April 25 can get a full refund and cancel their plans without financial penalty, as long as T-Mobile’s terms of agreement are met.