Consumer Advocates Urge Regulators to Investigate T-Mobile's False Ads, Abusive Debt Collection

Consumer advocates are calling out T-Mobile.

A coalition of leading civil rights, consumer, labor and social justice organizations has filed complaints with both the New York Attorney General's office and the Consumer Financial Protection Bureau (CFPB), calling for the regulators to investigate misleading ads and abusive debt collection at T-Mobile.

"It is profoundly disappointing that T-Mobile markets itself as a provider of equal access, but its misleading claims and aggressive debt collection likely have a disparate impact on communities of color and low income consumers," said Rashad Robinson, executive director of Color of Change. "We believe an investigation is necessary, and will hopefully force much needed change at the company."

Led by Change to Win, the coalition analyzed more than 5,500 consumer complaints filed with federal agencies and the Better Business Bureau since 2013, when the company launched its campaign promising consumers "contract freedom" and "no contract."

Researchers found that while T-Mobile boldly claims to rip up contracts, its equipment financing plan locks customers into two-year contracts, just like before. As a result, about 90 percent of customers enter into contracts with financial penalties for early termination.

The complaints also detail the company's broken debt collection practices. Of consumers with accounts in collection, 71 percent said that T-Mobile gave incorrect information to debt collection agencies. Nearly half reported little-to-no notice of the debt before it was referred to an agency.

The report clearly got under T-Mobile CEO John Legere's skin. When USA Today covered it, Legere harassed the reporter, Kaja Whitehouse. "Makes me think you were suckered? OR you in someone's back pocket?" Legere tweeted. Whitehouse responded that she understood he was unhappy, "But personal attacks? Really?"

In its story, USA Today reports that New York Attorney General Eric Schneiderman has launched an investigation into the company. Advocates are urging the CFPB to do the same soon.

"We fear that without swift action by the CFPB, millions of more consumers will be put in harm's way by T-Mobile's misleading claims and unfair debt collection practices," said Nell Geiser, research director for Change to Win Retail Initiatives.

Learn more at www.callingouttmobile.com.