T-Mobile has turned the U.S. wireless industry on its head over the past few years, forcing larger rivals to respond to its every move. With innovative “Un-carrier” initiatives intended to directly address wireless subscribers’ major pain points, T-Mobile went from a distant No. 4 among top nationwide carriers to No. 3, surpassing Sprint and continuing to grow rapidly each quarter.
The carrier’s outspoken CEO is known for making bold claims during press conferences, on Twitter and in interviews, but it’s T-Mobile’s advertising that now has it in hot water. Following complaints from multiple consumer advocacy groups, the New York Attorney General has launched an investigation.
New York Attorney General Eric Schneiderman is investigating complaints that T-Mobile makes false claims in its marketing and advertising, according to a report from USA Today. Consumer advocacy groups including Change to Win have alleged that T-Mobile’s repeated claims that it has done away with contracts is misleading to consumers.
According to a letter obtained by USA Today that is being sent by multiple advocacy groups to the Consumer Financial Protection Bureau, 91% of T-Mobile’s subscribers are currently locked into hardware contracts. The letter also alleges that T-Mobile engages in “abusive debt collection practices.”
“We ask T-Mobile to reform its own practices by no longer using the misleading language around no contracts,” said Change to Win research director Nell Geiser. “We ask that it stop claiming that it pays customers’ early termination fees.”
T-Mobile’s “no contract” claims have already undergone changes. While early language was broad and vague, T-Mobile has since been a bit more careful in clarifying that its policies surrounding contracts. While the carrier no longer requires service contracts, if customers purchase phones or other hardware from T-Mobile and do not pay for them in full up front, they’re still required to enter into an equipment contract that must be paid in full before they can terminate their service.
Of course, T-Mobile CEO John Legere has already responded to the report on Twitter: