T-Mobile International AG is a German holding company for Deutsche Telekom AG's various mobile communications subsidiaries outside Germany. (Photo : Reuters)
T-Mobile, America's leading wireless carrier, is under fire for launching an allegedly false ad campaign. A letter has been submitted to the Consumer Financial Protection Bureau claiming that the ads were "deceptive marketing" and that the company is abusing debt collection practices.
New York Attorney General Eric Schneidman has begun investigating on the complaints for the misleading ads, according to USA TODAY.
Although T-Mobile CEO John Legere has implemented a modern carrier plan which enables users to be free of contracts, 91 percent of their users claim they are still bound by 2-year contracts because of the phones and other equipment attached to their accounts.
The phones and accessories have an equipment instalment plan and are payable over the course of 24 months. However, if user wants to exit the contract, they should pay a massive lump sum.
This is contradictory to T-Mobile's promising campaign that tells the consumers they can quickly switch carriers whenever they want to, according to BGR.
Consumers who would like to end their contracts with T-Mobile before the 24-month lock-in period would end up paying more than the traditional contract. They can also be placed in debt collection "with little or no notice," according to the complaint letter.
"We ask T-Mobile to reform its own practices by no longer using the misleading language around no contracts," Change to Win Research director Nell Geiser said. "We ask that it stop claiming it pays customers' early termination fees."
T-Mobile's spokesperson has not responded yet, but their CEO tweeted, "We stand by our ads! Contrary to click-bait headline, we haven't been accused of false advertising by any regulatory body."
