Commentary

NYC Slams T-Mobile Metro's Sales Tactics In Multipronged Lawsuit

After a yearlong investigation by its Department of Consumer and Worker Protection (DCWP), New York City yesterday filed a lawsuit  in Manhattan Supreme Court Wednesday against T-Mobile and several Metro by T-Mobile brand dealers alleging abusive sales tactics at its stores.

“The cellphone service provider preyed on New Yorkers with weak credit history by selling used phones as new ones, enrolling victims in costly financing plans without their permission and overcharging them,” the city charges in a complaint that outlines “‘thousands’ of instances of rip-offs involving more than 50 stores and authorized dealers,” Shant Shahrigian reports  for the New York Daily News.

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"In one example, Kathy Johnson returned her ‘new’ iPhone to authorized T-Mobile dealer Wireless Broz, Inc. in Staten Island. The store agreed to swap phones, but when she took the replacement to an Apple store, the jilted customer discovered that it had been used,” Shahrigian writes.

“‘When Ms. Johnson confronted Wireless Broz Inc. on Staten Island, the salesperson told her to get the f--k out of the store,’ the city’s complaint states.”

In all, DCWP “claims to have documented more than 2,200 violations committed by T-Mobile at 56 Metro stores located across all five boroughs of the city. Those include cases where the carrier allegedly added hundreds of dollars of additional costs to the advertised price for a device and getting customers to e-sign leasing contracts without being made aware of the charges. In at least 21 instances known to the city, those Metro locations also sold previously used phones as new devices,” AJ Dellinger writes  for Engadget.

In another example, “a woman thought she had bought a phone advertised at $599 from a Bronx dealer, only to learn later that she had signed up for a 12-month lease costing $2,191.30,” Reuters’ Jonathan Stempel reports.

“New York City also said the website of Metro by T-Mobile deceptively advertised a ‘30 day guarantee’ on phone purchases, though the fine print said the guarantee was just seven days and covered only a ‘small sub-category’ of transactions,” Stempel adds.

“We take these allegations very seriously and are continuing to investigate so we can respond to the city. Though we can’t comment on the specific claims at this early stage, what we are seeing alleged here is completely at odds with the integrity of our team and the commitment they have to taking care of our customers every day,” T-Mobile replied via email to FierceWireless Linda Hardesty and other reporters seeking comment.

“The lawsuit, which calls for the company to give up money it made from the practices and for the creation of a restitution fund for victims, comes as a coalition of state attorneys general led by New York and California seek to block T-Mobile’s planned acquisition of rival Sprint Corp. The group includes attorneys general from 17 states, and a trial is scheduled to begin in December,” Sarah Krouse writes  for The Wall Street Journal.

“Federal telecommunications regulators and antitrust officials have blessed the merger subject to some conditions including the sale of Sprint’s prepaid brands and some airwaves,” Krouse adds.

“In a statement this week, New York Attorney General Letitia James called the merger ‘bad for consumers, bad for workers, and bad for innovation,’” after Illinois joined the suit filed in U.S. District Court in Manhattan to block the merger, reports  Gizmodo’s Catie Keck. The trial is slated to begin Dec. 9.

Meanwhile, T-Mobile yesterday rolled out a T-Mobile Essentials Unlimited 55 plan for boomers who, in the words of T-Mobile CEO John Legere, “are the generation that invented wireless, yet the carriers continue to completely patronize and insult us,” Jess Barnes writes for Cord Cutters News.

The plan, which mimics the T-Mobile Essentials plan, costs $55 per month for two lines, plus taxes and fees. There are also opportunities for an upsell to Magenta Unlimited 55 (an added $35 per line) or Magenta Plus Unlimited 55 (additional $45 per line), plans that have more features and also include taxes and fees. But what fun is a utilities or phone bill without obscure and mysterious added fees?

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