Washington state AG orders T-Mobile to refund customers for ‘deceptive’ no contract plans

When T-Mobile announced last month that it was going to become the “un-carrier” and do away with cell phone contracts, things might have sounded too good to be true. Well, it was; even with the new month-to-month contracts, customers would have to pay an additional fee if they decided they wanted to switch carriers within two years of signing up for a new plan. Seems a little unfair? Turns out that some powerful people agree – including the attorney general for Washington state, who has ordered T-Mobile to make it up to customers by giving them their money back.

Under the original announcement, any new T-Mobile customer that signed up after March 26 would be placed on a “no contract” month-to-month agreement that featured tiered levels of data and voice minutes, while also paying full-price for the phone itself. However, even though the agreement T-Mobile was offering was a month-to-month plan, if customers decided to switch carriers within two years, they’d either have to return their phone or pay out the remainder of the contract.

Calling T-Mobile’s advertising of its new plan “deceptive,” Washington state’s attorney general Bob Ferguson first ordered an investigation of the offer before taking action when he learned the fine prints. “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 press release issued by his office. “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.”

As a result of Ferguson’s action, any T-Mobile customer who signed up between March 26 and today may receive a full refund for equipment as well as cancel their plans without having to pay any remaining balance. In other words, fulfill the promise of a true “no contract” situation. All customers who are eligible for this action will be contacted by T-Mobile and given thirty days to respond.

“As America’s Un-carrier, our goal is to increase transparency with our customers, unleashing them from restrictive long-term service contracts  – this kind of simple, straight forward approach is core to the new company we are building,” T-Mobile responded in a statement. “While we believe our advertising was truthful and appropriate, we voluntarily agreed to this arrangement with the Washington AG in this spirit.”

Although Ferguson’s office concurred that T-Mobile was entirely cooperative in its investigation, the company still finds itself liable for $26,046.40 in legal fees incurred during the whole process. Just imagine how expensive it would have been had T-Mobile fought it.