Did T-Mobile’s no-holds barred advertising campaign cross the line of ethical business practices?
Three labor unions think so and are using their consumer advocacy group to accuse the carrier of deceptive advertising as well as placing customers on services they never asked for, such as device insurance plans.
On Wednesday the group, called Change to Win Retail Initiatives, filed a complaint with the Federal Communications Commission asking the agency to investigate T-Mobile and to take corrective action. The group is backed by the International Brotherhood of Teamsters, the Service Employees International Union and the United Farm Workers of America.
T-Mobile, which does not have a large unionized workforce, has been aggressively marketing itself as the “Uncarrier” for more than two years in an attempt to shake up the industry by eliminating carrier contracts and device subsidies and offering customers unlimited streaming of certain video services. Its efforts have resonated with consumers. T-Mobile added more than 27 million new customers since early 2013, making it the fastest growing wireless company in the industry. Last year, it overtook rival Sprint to become the third largest carrier in the US.
But Change to Win says T-Mobile’s fast-paced growth could be attributed in part to signing up customers for services they never ordered.
The group also claims the company’s flashy marketing isn’t what it seems when you read the fine print. The carrier’s no-contract plans, for example, often require customers to either buy an installment plan or lease a phone through T-Mobile. Cancel that service, however, and consumers are still on the hook for the unpaid cost of their phones, which can be more than a two-year contract’s early termination fee.
Change to Win’s complaint also questions T-Mobile’s ads claiming to pay the early termination fees for people switching from AT&T, Verizon or Sprint. That’s because customers still have to pay those fees upfront, and can wait eight weeks or more before getting reimbursed. Some customers say they never got those reimbursements, and that has made their credit ratings suffer, according to the group.
Despite these allegations, recent customer satisfaction surveys from JD Power and Consumer Reports rank T-Mobile No. 1 among the big four national carriers in overall customer satisfaction.
Change to Win claims it has conducted a review of T-Mobile’s advertisements and promotions and examined more than 5,500 customer complaints filed between January 2013 to September 2015 with the Better Business Bureau, the Consumer Financial Protection Bureau, the Federal Trade Commission and the FCC.
The group’s most damning accusation could be what it calls a pattern of complaints from people enrolled in add-on services, such as phone insurance plans, upgrades to unlimited data plans or a leasing program. Some people said they never intended to sign up for these programs and had trouble canceling these unwanted services, according to the complaint.
T-Mobile’s retail employees told Change to Win they’re pushed to add services to 90 percent of all new accounts.
“Employees are under a lot of pressure to reach these targets by encouraging them to enroll as many people as possible in these programs,” said Nell Geiser, Change to Win’s research director. “So it’s not a surprise if people [are] being signed up for services they didn’t authorize or want.”
T-Mobile didn’t issue an official statement on the FCC complaint and declined to comment on the allegations directly. Instead, the company pointed to a tweet from its outspoken CEO John Legere from December when the group filed a similar complaint with the Consumer Financial Protection Bureau.
“We stand by our ad! Contrary to the click-bait headline, we haven’t been accused of false advertising by any regulatory body.”
The FCC did not respond to requests for comment on the complaint filed.
While it’s true that no federal regulator has taken any action, New York Attorney General Eric Schneiderman’s office said last month it has launched an investigation into T-Mobile’s practices.