Ina Fried

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T-Mobile Settles Claim That Its No-Strings Plans Have Too Many Strings

T-Mobile has settled allegations by Washington state that marketing of its new plans didn’t adequately disclose the limits to its new contract-free plans.


In particular, the state’s attorney general took issue with the fact that T-Mobile forces those financing their phones to either continue service with the carrier until the device is paid for or to pay the full remaining cost of the phone when they want to cancel.

“Consumers who cancel their wireless service face an unanticipated balloon payment for the phone equipment — in some cases higher than termination fees for other wireless carriers depending on how early they cancel,” the Washington attorney general’s office said in a statement.

Under the agreement announced Thursday, T-Mobile consented to changes in how it markets the plans and to offer refunds to anyone who signed up with T-Mobile between March 26 and April 25.

“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 said 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.”

Announced last month, T-Mobile’s new plans drop phone subsidies and two-year service commitments. Those who pay for their phone in full or bring their own device are free to cancel whenever.

Customers can also choose to finance their phone over two years; those who do find themselves in a situation that looks roughly similar to a contract.

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There’s a lot of attention and PR around Marissa, but their product lineup just kind of blows.

— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google