The Joplin Globe, Joplin, MO

Local News

June 23, 2013

Joplin woman benefits from legal settlement with cellphone company

JOPLIN, Mo. — An agreement between the Washington state attorney general and cellular company T-Mobile has worked to the benefit of one Joplin woman and could affect more of the company’s customers in the area.

Jane Daniels said she had a specific request when she talked with an employee at the T-Mobile kiosk at Northpark Mall in April.

“I don’t want the bill to be more than $50 (per month),” Daniels said.

She paid $107 at the store, which she said she thought covered the cost for the phone, but it turned out to be just a down payment.

Subsequent bills also were well above her $50 threshold.

While she later learned that her plan was $50 — the lowest-price plan T-Mobile offers — she also learned that she was making a payment on the phone, as well as paying for the insurance and a warranty for it.

She said she couldn’t afford that, so she canceled her service and took her phone back to the kiosk. She said the employee refused to take the phone and told her she would have to pay for it. The balance remaining on her bill for the LG Google Nexus 4 phone was $408.

According to Washington state Attorney General Bob Ferguson, T-Mobile earlier this year had launched a new type of wireless service plan, claiming to offer “no restrictions,” “no annual contract” and no requirement that the consumer “serve a two-year sentence.”

But, this new plan did not include a phone. Instead, the company provided the option for consumers to purchase a phone at a monthly rate over a two-year period. It also let customers bring their own phone or pay the entire cost of the phone upfront.

Many other cell providers subsidize the cost of the phone with the contract, typically for two years. T-Mobile charges for the phone and the plan separately, so when the phone is paid off, the customer’s bill decreases. But if the plan is canceled, the customer still has to pay for the phone. With other providers, customers must pay a fee, sometimes hefty, to cancel a contract early.

According to Ferguson, consumers who canceled their T-Mobile wireless service were sometimes left with a “balloon payment” for the phone and equipment that in some cases was higher than termination fees for other wireless carriers.

Ferguson found T-Mobile’s practice deceptive and said the company failed to adequately notify customers of the cancellation terms. T-Mobile’s offices are in Bellevue, Wash.

Ferguson said in an April 25 statement announcing the agreement: “My office identified that T-Mobile was failing to adequately disclose a critical component of their new plan to consumers, and we acted quickly to stop this practice and protect consumers across the country from harm.”

As part of the agreement, T-Mobile had to inform customers nationwide and offer refunds to those who purchased a plan and a phone between March 26 and April 25.

That included Daniels.

She said that when she took her phone and the postcard explaining the agreement back to the T-Mobile kiosk, it wasn’t honored initially.

Daniels then called the number on the card. When she did, a person she spoke with told her to return to the kiosk with the phone and it would be accepted.

She successfully returned the phone at the kiosk earlier this month, and part of her money was refunded. She was told that she would receive the rest of the money due to her in the form of a check from T-Mobile.

Daniels said the kiosk employee apologized to her for the problems.

The employee declined to speak with a reporter, referring questions to a corporate media spokeswoman. The spokeswoman didn’t return messages left by the Globe over the course of three days.

Agreement

UNDER THE AGREEMENT between T-Mobile and the Washington state attorney general, the company must make clear to future customers the consequences of canceling the service plan.

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