What you need to know
- T-Mobile, which has called itself the “Un-carrier” and sold cellular plans with lifetime Price Lock guarantees, announced in May that it would be raising the price of all plans — new and old.
- The move understandably irritated subscribers who were told their rates would never change, and they filed complaints with the FCC.
- After T-Mobile dismissed the complaints, users filed a class-action lawsuit against the company that will challenge its recent decisions in court.
T-Mobile has had somewhat of a fall of grace over the last few years, becoming one of the same giant conglomerate carriers that it originally vowed to beat. The quality of its services is arguably better than ever — T-Mobile has been grabbing up as much 5G spectrum coverage as it can, and it’s showing in real-world performance. However, T-Mobile also started to roll out some anti-consumer policies and big acquisitions. Most recently, it announced price hikes that even extended to the Price Lock plans.
For those unfamiliar, Price Lock plans at T-Mobile had the unique caveat of offering no price increases, ever. That’s rare in the cellular industry, and it’s partially why T-Mobile grew so fast. People loved the idea of subscribing to a cellular plan and never having to worry about their rates changing over time. Often, these types of deals and promotions have caveats in the fine print. But in this case, T-Mobile clearly stated what it was offering in the introductory press release for Price Lock plans:
“With the Un-contract, T-Mobile signs, and customers hold all the power. Now, T-Mobile ONE customers keep their price until THEY decide to change it,“ the press release said. “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.”
There was no nonsense in the footnotes of that press release, or the fine print. It was simple: if you subscribed to select T-Mobile plans, your rates would never change. Or so users thought, because T-Mobile tossed that notion aside when it announced price hikes between $2 to $5 per plan, per line for all users in May 2024. It would seem that this move violated T-Mobile's Price Lock and Un-Contract obligations, but the company didn’t think so. It brushed off the FCC complaints with a standard letter that rejected notions that it did something wrong (via The Mobile Report).
The letter did tell us that, at least internally, T-Mobile sorts Price Lock plans into at least two groups, which customers are calling Price Lock 1.0 and Price Lock 2.0. The Price Lock 1.0 plans cover users who subscribed between April 28th, 2022, and Jan. 17th, 2024, whereas the 2.0 version covers anyone who subscribed after Jan. 17th, 2024. This is important context, because Price Lock 2.0 subscribers are affected by the price hikes, but Price Lock 1.0 subscribers aren’t.
The burning question is how subscribers who bought into the Price Lock plans before April 28th, 2022 are affected by T-Mobile’s price hikes. The company hasn’t made that clear so far, and the answer may determine whether T-Mobile’s changes will hold up.
T-Mobile users aren’t waiting to find out, though. A group of customers have already filed a class-action lawsuit against the company in the US District Court for the District of New Jersey, as reported by Wired.
Right now, there are only four class members, representing New Jersey, Georgia, Nevada, and Pennsylvania. However, they’re looking to expand that to include all United States residents "who entered into a T-Mobile One Plan, Simple Choice plan, Magenta, Magenta Max, Magenta 55+, Magenta Amplified or Magenta Military Plan with T-Mobile which included a promised lifetime price guarantee but had their price increased without their consent and in violation of the promises made by T-Mobile and relied upon by Plaintiffs and the proposed class.”
The class action suit directly challenges T-Mobile’s move to increase the rates of the Price Lock plan, arguing that the company did not have customer consent to do so under the terms of the initial agreement.
"Based upon T-Mobile's representations that the rates offered with respect to certain plans were guaranteed to last for life or as long as the customer wanted to remain with that plan, each Plaintiff and the Class Members agreed to these plans for wireless cellphone service from T-Mobile," according to the filing. “However, in May 2024, T-Mobile unilaterally did away with these legacy phone plans and switched Plaintiffs and the Class to more expensive plans without their consent.”
This lawsuit was just filed earlier this month, and it’s in its early stages. However, from the outside looking in, it seems cut and dry. T-Mobile flaunted its Price Lock guarantee for years, saying that users will never get unwanted price increases. Regardless of how this suit pans out, I think it’ll set a precedent for future companies, and could dictate how much company promises actually matter.
For example, there are a few ways this could shake out, and a few questions that need to be answered. Did T-Mobile falsely advertise by touting the Price Lock guarantee, only to break that promise? Are there grounds for T-Mobile to be liable for breach of contract? We’ll leave the answers up to the lawyers and the courts, but they are sure to have an impact on the way companies market and do business.
Recently, it feels like companies have little accountability for the promises they make. I, for one, am hoping that this T-Mobile class action suit is the catalyst that turns the tide. Customers deserve better treatment, and it’s really as simple as that.
