Ad Watchdog: T-Mobile Should Explain Better How ‘Ditch And Switch’ Payments Work

Mobile phone contracts as a business model are dying out, but there are still people under contract left out there, and T-Mobile wants to recruit them. Only an analysis by the National Advertising Review Board (NARB) shows that the carrier’s campaign aimed at these people, “Ditch and Switch,” advertises in a way that’s mostly true, but leaves a few important details out.

The NARB is a program of the Council of Better Business Bureaus, which is meant to resolve objections that companies have to each other’s ads before escalating things to, say, the Federal Trade Commission. It’s a voluntary process, and in this case the problematic ad claims were brought to NARB’s attention by competitor AT&T, which has almost entirely moved away from the two-year contract model anyway.

The first problem with program ads is that T-Mobile advertises the amount it pays consumers as less generous than it actually is.

“Several of the challenged advertisements state that T-Mobile will pay ‘up to $650’ for amounts owed to the consumer’s previous carrier when the consumer switches to T-Mobile,” NARB noted in its analysis of the ads. “However, the record indicated that T-Mobile does not impose any limits on the amount that it will reimburse for what is owed to a previous carrier for the consumer’s phone.”

This is not actually the upper limit, so why say "up to" $650?

This is not actually the upper limit, so why say “up to” $650?

Why say that the limit is $650 when it isn’t? That’s a good question, and T-Mobile didn’t provide an explanation, but the maybe the point is to provide an anchor, and make sure customers expect at most $650, which happens to be the full retail price of a base-model iPhone.

The other issue that NARB noted was a lack of disclosure about how new customers get the money: the ad implies that T-Mobile pays one’s old carrier off directly, and that isn’t so. Customers receive trade-in value for their new phones after making the swap, and that trade-in value can only be used to pay for a new phone and account fees at T-Mobile.

Customers then receive any early termination fees that they owe as a prepaid debit card, but may not necessarily receive the card in time to use it to actually pay off their accounts at the old carrier directly. This promotion is only for people who have the cash on hand, in other words.

T-Mobile, for its part, promised to take the watchdogs “recommendations into account in formulating its future advertising.”

NARB Recommends T-Mobile Better Disclose to Consumers Terms of ‘Ditch & Switch’ Ad Campaign [NARB]

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