A coalition of consumer groups is calling for the Consumer Financial Protection Bureau (CFPB) to investigate what it calls T-Mobile’s “misleading advertisements and abusive debt collection practices.”
According to a complaint filed by Change to Win, T-Mobile has engaged in deception by billing its services as “no contract” obligations when many month-to-month services are tied to two-year equipment financing plans that carry financial penalties for early termination.
Additionally, the complaint alleges T-Mobile engages in “abusive debt collection practices, including providing third party debt collectors with inaccurate information and customers with little or no notice of the alleged debt.” The document further accuses T-Mobile of exploiting an arbitration clause in its wireless contract to erect “significant barriers against injured customers seeking compensation.”
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 2013, when the company launched its ‘Un-Carrier’ program.”
Change to Win is a federation of labor unions representing more than 5 million workers in the private and public sectors, according to the complaint.
The organization’s formal filing was accompanied by a letter of support from a number of other consumer and rights groups, including the Consumer Federation of California, Color of Change, the League of United Latin American Citizens, Asian Pacific American Advocates, US Action and the Center for Media Justice.
In the letter, the groups argue that many of T-Mobile’s advertisements are targeted at those in a vulnerable financial position and request action before the carrier’s practices spread “across the wireless industry.”
“We are concerned that, without regulatory intervention, consumers will continue to enter into service agreements expecting a no obligation, month-to-month arrangement only to find that they are saddled with hefty equipment-related expenses if they terminate service,” the letter reads. “As the wireless market evolves, consumers need regulators to ensure each carrier is providing accurate and straight-forward disclosures in its advertising.”
New York Attorney General Eric Schneiderman has already opened a similar investigation into the Un-carrier’s practices, USA Today reported Tuesday.
Change to Win’s complaint requests that the CFPB compel T-Mobile to reform its advertising and debt collection practices.
T-Mobile did not immediately respond to a request for comment.
Filed Under: Industry regulations