Wash. Attorney General Exposes T-Mobile's Un-Carrier Claims

[steamroller16]

What? This is not deception. What is deception is telling customers that their phones actually cost $200 and making up the rest (and then some) by forcing them to sign up for "data plans" which are in large part just monthly payments for the phone.
T-mobile has done the right thing. They have separated the cost of the phone and service by allowing customers to finance their phones, much like you would finance a car or a house. If you paid the full phone price, then you would not face a balloon payment (or early termination fee). You can terminate the contract at any time.
"Customers who purchase a phone using the 24-month payment plan must carry a wireless service agreement with T-Mobile for the entire 24 months, or pay the full balance owed on the phone if they cancel earlier."
Of course you have to pay off your phone. You can't decide on a day of your choosing to stop paying your car payment of house payment either.
This article's and the AG's portrayal of tmobile is absolutely ridiculous.

 

[steamroller16]

Testing. My previous post didn't show up,

 

[Anomalyx]

How dare T-Mobile disallow you from purchasing a phone for the price of a single month of service!
Seriously people, there is plenty of option for a non-contract plan. I don't understand how people expect a free smartphone to go along with that. You have the option to buy a phone outright or to enter in a contract that says you'll receive a heavy discount on the phone in exchange for 2 years of constant service. The option that T-Mobile is claiming DOES exist... it's just that nobody is actually taking it. They're choosing the contract plans instead, because it heavily discounts their hardware cost.

 

[vanka]

I am amazed by both the ignorance and lack of common sense of both the author of this article and many of the commentators.
I do not know how T-Mobile could be any clearer; they said that they no longer have any contracts for the phone plans - and they don't. You can leave at any time without being slammed with a contract-termination penalty. What T-Mobile has also made clear is that phones are no longer subsidized in the monthly plan price - basically they have decoupled the two - what you pay for your monthly service plan is separate from the cost of your phone.
Obviously when you get service from T-Mobile you'll need a phone to make use of it. T-Mobile allows you to bring your own compatible phone, purchase one of theirs' at full cost, or get a 'loan' to pay off the phone over a 24-month period. One of the terms of the loan is that if you cancel your service with T-Mobile the full amount of the loan is due. This seems to be the sticking point for most people - a 'hidden' early termination fee; which is not the case at all. This is not a fee for terminating your service contract - as there was no contract to terminate; but rather the loan becoming due because you failed to follow the terms of the loan - i.e. no longer being a customer of T-Mobile.
Now many have complained that this is not a fair practice - requiring the full loan to be repaid as soon as the customer cancelled T-Mobile's service. Many have compared it to a bank requiring the customer to get their car services at a particular shop if the customer gets their car loan through them; and then putting in a provision that the full loan is due if the car is serviced elsewhere.
This analogy is very misleading and misses the mark. Remember that T-Mobile is not in the business of providing small loans for people to buy cellphones - rather it is in the business of providing cell/data services. This is evident in the fact that from all accounts T-Mobile is providing the loans interest-free. It is doing this as a way to get more people to sign up for their service plans. It makes sense to offer an interest-free loan to a customer who is paying you a monthly fee for cell/data services - it makes absolutely no sense to provide the same interest-free loan to a non-customer - in fact they'd be losing money.
When I last purchased a car I decided to go through a credit union - and I think the same analogy holds true with the T-Mobile loans. When I inquired about a loan at my neighborhood CU I was told I'd have to become a member. There were some conditions that were required to join - but they were easy to met. Now one of the terms of membership and the loan was that I could not dissolve my membership without first paying off the loan - which I could do either by sticking out the full term of the loan or paying out the car on the spot. T-Mobile is doing something similar - it is willing to provide an interest-free loan - but only to its customers. Therefor it made it clear that if someone stops being a customer then T-Mobile is no longer willing to service the loan and requires the loan to be paid off on the spot.

 

[JustPlainJef]

@Anpadh - Your analogy is horrible. Let’s try this: You buy a car, agree to a 5 year loan, and half-way through the loan, you decide you aren’t happy with the gas mileage. What happens? According to your logic, and the logic of the AG, you should be able to quit paying for the car, and keep it, because…….. you aren’t happy with it???
Last I hear, that was called “stealing.”
True, to keep the cell phone analogy, you can’t drive the car anymore (no service), but you can still sell it and pocket the money.
I’ve been into two T*Mobile stores and spoke to a rep on the phone, and all have been very upfront with me. It was explained to me every time. Phone plan is $$. If I want a phone, it’s $100 down and $20 / month for 24 months (for example). After the 24 months, I no longer have a phone payment. My monthly payment goes back to $$. That’s the biggest change and the best part of it. With VZW or AT&T, does your payment go down after your phone is “paid off” with your two year contract?
Nope.