New York City sued T-Mobile USA on Wednesday, blaming the fourth-largest U.S. mobile phone firm for engaging in “excessive” sales abuses of customers for its lower-priced, prepaid wireless model, Metro by T-Mobile.
In a case registered in the state supreme court in Manhattan, the town said it had identified over 2,200 violations by T-Mobile, whose “pervasive” illegal activity spanned 56 Metro stores in all five boroughs, along with approved dealers and stores run by its MetroPCS NY unit.
Spokespeople for the city’s law division and Consumer Affairs Commissioner Lorelei Salas didn’t immediately reply to requests for remark.
The case was filed as T-Mobile tries to win obligatory approvals to merge with Sprint Corp, the No. 3 US mobile phone firm.
Sixteen U.S. states, led by New York and California, and Washington, D.C. have sued to stop the merger, which they say will increase costs for customers by reducing competition.
It further accused T-Mobile of collaborating with third parties to enroll unsuspecting consumers in expensive financing plans without their approval.
The complaint cited one instance in which a woman thought she had bought a cellphone advertised at $599 from a Bronx dealer, only to learn later that she had unknowingly signed up for a 12-month lease costing $2,191.30.
New York City further stated the website of Metro by T-Mobile deceptively marketed a “30-day guarantee” on phone purchases, although the fine print mentioned the guarantee was just seven days and covered only a “small sub-category” of transactions.
The case seeks to recoup overcharges and impose civil penalties of $350 to $500 per violation, among different remedies.