NAD Finds T-Mobile Pricing Claim Not Misleading; Recommends Modifications to Certain Disclosures for Unlimited Wireless Plans
For Immediate Release
Contact: Abby Hills, Director of Communications, BBB National Programs
301.412.7769 / email@example.com
New York, NY – June 24, 2020 – The National Advertising Division (NAD) determined that T-Mobile USA, Inc.’s “four lines” advertising was not misleading as to the price per line of a wireless plan. However, NAD recommended modification of disclosures to advertising for T-Mobile’s Essentials and other unlimited plan offerings in certain contexts, to clearly and conspicuously disclose why and when Essentials plan customers will experience prioritization lower than other T-Mobile customers. T-Mobile’s claims were challenged by Charter Communications, Inc., provider of a competing wireless service.
The challenged claims, which appeared on website pages containing information about T-Mobile’s Essentials plan, several video advertisements, and two advertisements for T-Mobile’s 5G service, included:
“Unlimited Data on our Network.”
The Essentials plan is “[u]nlimited at a price you’ll love.”
The Essentials plan provides “[u]nlimited talk, text, & smartphone data on our network.”
T-Mobile’s Essentials plan provides customers with “unlimited” high-speed data without any reduction in data speed.
Customers can purchase fewer than four lines at the same or similar prices available to customers who purchase four lines.
T-Mobile offers several unlimited wireless plans to customers, including the Essentials plan at issue in this challenge. T-Mobile’s Essentials customers are prioritized lower than other T-Mobile brand customers at all times, but may only see reduced speeds in those times and locations where T-Mobile’s network is congested. All T-Mobile customers who exceed 50 GB in usage are prioritized lower than all other T-Mobile customers.
NAD concluded that the Essentials plan may be properly identified as “unlimited” even though its users may have their data prioritized behind other T-Mobile users, as long as those policies are disclosed. NAD determined that the possibility of prioritization and the potential for slower data speeds when T-Mobile’s network is sufficiently congested is material information that might impact the plan choice made by T-Mobile’s customers. Accordingly, NAD reviewed the challenged advertising and the sufficiency of T-Mobile’s disclosures to determine whether it conveyed a misleading message about the material terms of T-Mobile’s Essentials plan.
NAD noted that although Essentials plan customers accessing data are placed in line behind T-Mobile’s other unlimited customers at all times, none of the disclosures share information as to why or when Essentials plan customers may experience slower speeds. The disclosure that customers “may notice lower speeds” tells consumers something they already know – that speeds vary on wireless networks. It is material information that for Essentials Plan customers, their speeds are prioritized behind other T-Mobile customers (and potentially slower) when the network is sufficiently congested and they are using data.
NAD further noted that advertising for T-Mobile’s unlimited plan offerings, like its web page that compares plans, does not disclose the differences between prioritization as applied to customers on the Essentials plan as compared to customers on other plans, information that is especially significant when consumers are comparing plans. T-Mobile advertises that its plans offer “unlimited talk, text and data, on our network,” without disclosing material information about why and when prioritization is applied to Essentials plan customers as compared to other unlimited plan customers. NAD determined that, in this context, the “unlimited talk, text and data,” claim reasonably conveys the message that the “unlimited” talk, text and data terms and conditions for T-Mobile’s Essentials plan are similar to those on its other plans.
NAD concluded that the content of T-Mobile’s disclosures in advertising for its Essentials plan and in advertising that highlights the features of its unlimited plans do not adequately apprise consumers of T-Mobile’s prioritization of certain data, specifically why and when Essentials customers may experience slower speeds. Therefore, NAD recommended that when T-Mobile touts its Essentials plan and its unlimited plan offerings in a context which equates the benefits of the plans, it disclose sufficient details of its use of data prioritization policies to inform consumers as to why and when Essentials plan customers will experience prioritization that is lower than other T-Mobile customers.
NAD further recommended that when T-Mobile claims, generally, that it offers unlimited plans, its disclosures should be broad enough to describe any data limitations on all of its unlimited plans. NAD also determined that where T-Mobile makes no representations about its unlimited plans, no such disclosure is necessary.
After reviewing the prominence of T-Mobile’s disclosure as they appeared in the challenged advertisements, NAD determined that certain of the disclosures were sufficiently clear and conspicuous, while others were not. Therefore, NAD recommended that some of T-Mobile’s disclosures be modified to be more clear and conspicuous such that consumers can notice, read and understand them.
Finally, NAD considered whether consumers are being misled as to the price per line of a wireless plan by T-Mobile’s advertising for four lines. NAD determined that consumers understand an offer of “four lines” and know that means, in the context of wireless services, that the advertised price is only available when purchasing four lines of service. NAD concluded that T-Mobile’s pricing claims were not misleading as to the price for one, two or three lines of service and that no further disclosure was required given that the main claim expressly states that the touted price is the price per line for a specified number of lines.
In its advertiser’s statement, T-Mobile stated that it agrees to comply with NAD’s recommendations. T-Mobile further stated that although it disagrees “with NAD’s conclusion that we should alter our existing disclosures concerning our Essentials Plan, we remain a strong supporter of the self-regulatory process and will take NAD’s recommendations into account in future advertising.”
About the National Advertising Division: The National Advertising Division (NAD), a division of BBB National Programs, provides independent self-regulation and dispute resolution services, guiding the truthfulness of advertising across the U.S. NAD reviews national advertising in all media and its decisions set consistent standards for advertising truth and accuracy, delivering meaningful protection to consumers and leveling the playing field for business.
About BBB National Programs: BBB National Programs is where businesses turn to enhance consumer trust and consumers are heard. This independent, non-profit organization enhances trust, innovation, and competition in the marketplace through the development and delivery of cost-effective, third-party self-regulation, dispute resolution, and accountability programs. BBB National Programs’ 10 leading industry self-regulation and dispute resolution programs resolve business issues of national and international importance, and fosters industry best practices in truth-in-advertising, child-directed marketing, data privacy, and dispute resolution. To learn more about industry self-regulation, visit bbbprograms.org.