A coalition of consumer groups wants the Consumer Financial Protection Bureau to investigate what it calls T-Mobile’s misleading advertisements and abusive debt collection practices.
A complaint filed by Change to Win 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 accuses T-Mobile of exploiting an arbitration clause in its wireless contract to erect "significant barriers against injured customers seeking compensation.”
T-Mobile has made fast gains in the U.S. wireless industry over the past few years, forcing larger rivals to respond. 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 after overtaking Sprint. T-Mobile continues to grow rapidly each quarter.
Change to Win’s complaint alleges that 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. T-Mobile has not officially responded to the complaint.
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 complaint was based on a review of more than 5,500 consumer complaints filed with federal agencies and the Better Business Bureau since 2013. The complaint requests that the CFPB force T-Mobile to reform its advertising and debt collection practices.
"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."
The organization’s filing was accompanied by a letter of support from several 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.