T-Mobile (TMUS)’s CEO, John Legere, brought a revolution in the telecom industry by guaranteeing freeing consumers of troublesome service contracts. USA Today reports that New York Attorney General Eric Schneiderman is investigating the complaints, and that Change to Win is sending a list of allegations to the Consumer Financial Protection Bureau. 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. Even when consumers challenged a charge, more than 40 percent reported that T-Mobile still sent their debts to collection-despite their disputed status.
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T-Mobile has been playing the role of good guy in the wireless industry, but there are some who would rather see them as a villain.
Change to Win said its complaint to the CFPB was based on its review of “more than 5,500 consumer complaints filed with federal agencies and the Better Business Bureau (BBB)” since T-Mobile launched its Un-carrier program in 2013. Schneiderman has yet to offer an official statement on the matter, and spokesman Eric Soufer declined to share any comment due to “ongoing” investigations. Second, people who wanted to switch carriers before their term was up had to pay “early termination fees” as high as $350.
T-Mobile spokeswoman Annie Garrigan did not comment on the USA Today report.
“T-Mobile decoupled the service portion from the device financing cost recovery portion”, Entner explained.
After this story was published late Monday, Legere tweeted about it, saying T-Mobile stands by its ads. “The consumer complaints suggest that T-Mobile improperly sends bills to collections and engages in practices that make it hard for customers to contest their debts”, the group writes.
“We also think their dependence on marginalized communities make them an important company to make accountable”, Geiser said, referring to data showing that 48% of T-Mobile customers who have financed their phone have sub-prime credit ratings.
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The group, which also signed the CFPB letter, plans to circulate a petition Tuesday to encourage the public to demand the CFPB investigate T-Mobile’s sales practices, Robinson told USA TODAY.
