T-Mobile hit with class-action lawsuit over price increases
T-Mobile (TMUS) is experiencing significant backlash from its customers, and this time it’s manifested as a class-action lawsuit.
Following the announcement in May regarding an increase in monthly prices to per line beginning in June for certain older phone plans that included a price lock guarantee, numerous customers expressed their outrage, asserting it breached the initial promotional terms when those plans were introduced.
The class-action lawsuit, filed on July 12, contends that the initial prices for T-Mobile’s One, Simple Choice, Magenta, Magenta Max, Magenta 55+, Magenta Amplified, and Magenta Military plans were “guaranteed to last for life or as long as the customer wished to remain on that plan.”
This price-lock assurance is detailed in T-Mobile’s Un-contract, which guarantees customers control over their service costs. “While your price may decrease − it won’t increase,” stated T-Mobile in a 2015 press release announcing the contract.
The lawsuit further emphasizes that in 2017, former T-Mobile CEO John Legere remarked at a press event that the company’s Un-contract empowers customers to dictate when the price of their service can change.
“With the Un-contract, T-Mobile signs, and customers hold all the power,” Legere mentioned during his presentation. “Now, T-Mobile ONE customers maintain their price until THEY decide to modify it. T-Mobile will never alter the price you pay for your T-Mobile ONE plan. When you sign up for T-Mobile ONE, only YOU have the authority to change your price.”
The lawsuit claims that T-Mobile raised prices for these legacy phone plans “without consent” and that it effectively “misled” its customers.
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Customer anger and legal actions against T-Mobile
“T-Mobile is fully aware that its customers are frustrated over being misled by its deceptive advertising,” states the lawsuit.
An internal document acquired by The Mobile Report suggests that T-Mobile attributed the price hikes to “costs and inflation.” Some customers took to Reddit to express their dissatisfaction with T-Mobile’s choices, with a number even threatening to switch to a different phone carrier.
“Will you leave T-Mobile because of the price increase?”
The plaintiffs in the class-action lawsuit are demanding “restitution of all amounts,” punitive damages, and a positive injunction that mandates T-Mobile to restore the legacy plans “for all Plaintiffs and Class members.” They are also seeking an injunction that prohibits T-Mobile’s purported “unfair and/or deceptive acts or practices.”
T-Mobile’s choice to implement price increases comes at a period when the company seems to be performing well financially. In its first-quarter earnings report for 2024, T-Mobile disclosed generating around billion in service revenues, marking a 4% year-over-year increase compared to the same quarter last year. The report also highlighted a 22% year-over-year increase in net income for the quarter, totaling .4 billion.
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