NEW YORK – The National Advertising Division (NAD) of BBB National Programs recommended that T-Mobile US, Inc. modify or discontinue certain claims for its Magenta Max mobile wireless service plan, including claims that:

The claims at issue, which appeared in two T-Mobile television commercials (the "Please Listen" ad and the "Cumpleanos" ad), were challenged by competitor AT&T Services, Inc.

"Price Lock Guarantee" Claim

At issue for NAD was whether T-Mobile's Price Lock Guarantee claim, as it appears in the Please Listen ad, clearly communicates to consumers that T-Mobile's Price Lock Guarantee refers only to the monthly rate that consumers pay for wireless service under the Magenta Max plan and does not include associated taxes and fees.

NAD found that while customers are accustomed to advertised prices of goods being exclusive of sales tax, reasonable consumers may not understand the meaning of "price" within the context of the Price Lock Guarantee claim in the Please Listen ad as referring to the service's monthly rate only and excluding fees and other taxes. Further, NAD determined that T-Mobile's disclosure is not effective in limiting the claim both as a matter of presentation and content.

NAD determined that the Price Lock Guarantee claim was unsupported and recommended that T-Mobile discontinue the "Price Lock Guarantee" claim or modify it to avoid conveying such a message. NAD noted that nothing in its decision prevents T-Mobile from making a more limited claim that it will not increase the monthly rate under the Magenta Max plan for talk, text, and data services.

NAD also determined that T-Mobile's Please Listen ad reasonably conveys the implied message that only AT&T and Verizon have recently imposed price hikes and fee increases on consumers for mobile wireless service. Because T-Mobile recently increased fees charged to consumers for mobile wireless service, NAD recommended that the commercial be modified to avoid conveying this unsupported message.

"Get up to $1,000 Back" Claims

Regarding the claim "when you switch your family to T-Mobile Magenta Max, you can get up to $1,000," NAD considered whether the Please Listen and Cumpleanos ads make it clear that T-Mobile was offering switching customers $200 per line for up to five lines of service, or whether a reasonable consumer could take away the message that they are eligible for the full $1,000 regardless of the number of lines switched.

NAD found that both ads reasonably convey the message that a typical consumer who switches to T-Mobile's Magenta Max plan is eligible to get $1,000. However, to the extent that the advertised offer can only be achieved by a certain class of consumer or under certain circumstances, the class of person or circumstances that can achieve the maximum level of performance claimed must be clearly and conspicuously disclosed.

Therefore, NAD recommended that the claim be modified to make it clear as part of the main claim, or in a similar font size in close proximity to the main claim, that the maximum amount advertised can only be attained by families switching five lines. Additionally, NAD recommended that the on-screen disclosures stating the material terms of the offer be modified to be clear, conspicuous, and easy to notice, read, and understand.

"Families with T-Mobile Save 20% Versus AT&T"

NAD considered whether T-Mobile's 20% savings claim, in the context of its Cumpleanos ad, conveyed the broad message that all of T-Mobile plans offer a 20% savings over comparable wireless plans offered by AT&T, or whether it conveyed a more limited message that such savings are available with T-Mobile's Essentials plan.

NAD determined that the Cumpleanos ad reasonably conveyed the message that consumers can save 20% when choosing T-Mobile plans over AT&T and Verizon plans and that the disclosure mentioning the Essentials Plan was not clear and conspicuous so as to limit the claim.

Additionally, NAD determined that because the Cumpleanos ad presents offers for the Magenta Max plan and the Essentials plan mere seconds apart, a consumer would reasonably understand these offers to be cumulative and not two completely distinct offers for two different plans. NAD found that the immediate proximity of the offers would reasonably convey the message that consumers would also save 20% with the Magenta Max plan as compared to AT&T.

While the record established that consumers who switch 3-4 lines to Magenta Max can save 20% there was nothing in the record to support the broad 20% savings claim when choosing any T-Mobile plan over any AT&T and Verizon plans. NAD, therefore, recommended that the Cumpleanos ad be modified to avoid conveying such a message.

In its advertiser statement, T-Mobile stated that it "will comply with NAD's decision." The advertiser further stated that it is proud of its Price Lock guarantee and $1,000 switching offer and "believes the challenged advertisements appropriately communicated the terms of its offers and rate plan savings. T-Mobile nevertheless indicated that the challenged commercials are no longer running and that as a supporter of self-regulation, it "will take NAD's recommendations into account with respect to its future advertising."

Read the press release here.

BBB National Programs