T-Mobile (TMUS) is facing major pushback from its customers, and this time, it’s in the form of a class-action lawsuit.
After the phone carrier announced in May that it was raising its monthly prices by $2 to $5 per line in June for a group of older phone plans that had a price lock guarantee, many customers were outraged as they claimed it was a violation of what was initially advertised when the plans were first introduced.
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In a class-action lawsuit, which was filed on July 12, it claims that the original 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 wanted to remain with that plan.”
This price-lock guarantee is solidified in T-Mobile’s Un-contract, which promises customers that they control what they pay for their service. “While your price may go down − it won’t go up,” said T-Mobile in a 2015 press release that announced the contract.
The lawsuit also highlights that in 2017, then-T-Mobile CEO John Legere stated during a press event that the company’s Un-contract allows customers to dictate when the price of their service will change.
A shopper looks over a display of Apple Inc. iPhones at a T-Mobile US Inc. store in Chicago, Illinois, U.S., on Friday, Oct. 21, 2016.
“With the Un-contract, T-Mobile signs, and customers hold all the power,” said Legere during his presentation. “Now, T-Mobile ONE customers keep their price until THEY decide to change it. T-Mobile will never change the price you pay for your T-Mobile ONE plan. When you sign up for T-Mobile ONE, only YOU have the power to change the price you pay.
The lawsuit alleges that T-Mobile increased the price for these legacy phone plans “without their consent” and that it overall “duped” its customers.
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“T-Mobile is well aware that its customers are angry at being duped by its false advertising,” reads the lawsuit.
According to an internal document obtained by The Mobile Report, T-Mobile claimed that the price hikes were due to “costs and inflation.” Some customers took to Reddit to reveal that they were unhappy with T-Mobile’s decision, with some even threatening to ditch T-Mobile for another phone carrier.
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The plaintiffs in the class-action lawsuit against T-Mobile are seeking “restitution of all amounts,” punitive damages and a positive injunction that requires T-Mobile to reinstitute the legacy plans “for all Plaintiffs and Class members.” It is also seeking an injunction that bans T-Mobile’s alleged “unfair and/or deceptive acts or practices.”
T-Mobile’s decision to increase its price increases comes at a time when the company appears to be doing well financially. In its first-quarter earnings report for 2024, T-Mobile revealed that it generated around $16 billion in service revenues, which is a 4% year-over-year increase compared to the same time period last year. It also revealed that its net income during the quarter increased by 22% year-over-year, earning $2.4 billion.
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