NEW YORK (AP) — Washington state's chief prosecutor says there's a catch to T-Mobile's new cellphone plans, which replace the traditional two-year service contract with an installment plan for phone buyers.
One of the benefits of the new plan is that buyers can cancel their service at any time. But Washington Attorney General Bob Ferguson says the company hasn't told customers that they have to pay the full remaining cost of the phone if they cancel service; they can't remain on the installment plan.
Ferguson announced Thursday that T-Mobile has agreed to warn customers across the country about the lump-sum payments, which can be higher than the "early termination fees" charged by other carriers when subscribers cancel their contracts.
In an agreement filed with a Washington state court, the company also agreed to issue full refunds on request to customers nationwide who bought T-Mobile phones from March 26, when the plan was introduced, to Thursday.
T-Mobile said it believes its advertising was "truthful and appropriate" and agreed to the arrangement in the spirit of increased transparency.
For a high-end phone like the iPhone 5, T-Mobile charges $100 up front, then $20 per month for two years. Customers also have the option of paying the phone outright for $580. While the installment plan adds $20 to the monthly cost, T-Mobile's service plans are cheaper than the competition.
T-Mobile USA is based in Bellevue, Wash., and is owned by German phone company Deutsche Telekom AG.
Earlier on HuffPost:
1. Give It To Your Kids So They Stop Taking Yours...
Every parent, aunt and uncle knows that no toy in the history of toys has ever been as appealing to a kid as an iPhone. They are shiny, they have games and grown-ups use them for important things. More importantly, they are either off-limits or doled out in limited quantities as a reward for, say, sitting still for a minute. Load up your old iPhone with games and give it to a deserving child in your life.
2. ...Or To Your Mom So She Can Finally See The Light
Alternately, if a Luddite adult has been thinking of taking the plunge into the world of smartphones, your old iPhone may help him or her get over the hump. If you have an iPhone 4 or 4S, you might also find someone who's still hanging on to an earlier model and give them the gift of an upgrade. You may just buy a friend for life (or at least until iPhone 6 comes out).
3. Use It As A Teeny-Tiny iPad
You'll be able to watch videos, send email and search Wikipedia for random facts to end cocktail-party disagreements with your decommissioned iPhone -- as long as you have a Wi-Fi connection. There's even a camera, which means you can avoid being that guy (or gal) at the concert who's turning heads for taking photos with an iPad.
4. Donate To Charity
Several charities accept old phones for donation, though it's worth remembering that these groups likely won't physically give your old phones to people in need. Rather, they work with phone recyclers and sell your donated phones to them. A nonprofit group called Cell Phones for Soldiers will take your "gently used" phone and sell it to recycling company ReCellular. It will then use the proceeds to buy calling cards for soldiers. The National Coalition Against Domestic Violence works with another recycling group in a similar manner. About 60 percent of the phones it collects are refurbished and resold. The money goes toward supporting the coalition. The remaining 40 percent of the phones are recycled, according to the group's website. It pays for shipping if you are mailing three or more phones. There are a few more suggestions from New York's Department of Environmental Conservation at: http://www.dec.ny.gov/chemical/8818.html .
5. Alarm Clock
Do you still use that old radio alarm you bought for your college dorm room in the 20th century? Join the 21st century by turning your old iPhone into an alarm clock. Hide it in a different spot in your bed each night for an added challenge.
6. Sell, Sell, Sell!
Join the eBay hordes and sell your phone for a few hundred bucks if you can. There will likely be a flood of the gadgets soon after people start getting their new phones, so it might make sense to wait a little. A company called Gazelle, meanwhile, will make an offer for your old phone based on its condition, your phone carrier and other information. A 32 gigabyte iPhone 4S on Verizon Wireless, for example, was recently going for $237 if it's in good condition and $90 if it's broken.
7. Trade In At GameStop
The video game retailer offers cash or store credit for old iPhones (along with iPods and iPads). The service is only available in stores and not online. A 32 gigabyte iPhone 4S on Verizon will get you up to $335 in store credit or up to $268 in cash.
8. Stream Music
Stick that baby in a speaker dock, spring for a Pandora subscription ($36 per year) or Spotify ($10 per month) and bam, you have a stereo. Or try SoundCloud. Although it's meant to let you create and share music with people, it's also a good place to listen to DJs you like or discover new ones. TuneIn, meanwhile, will let you listen to online radio stations playing music, sports, news or talk shows.
9. Keep As A Backup In Case You Lose Your Fancy New One.
Nearly one-third of cellphone owners have had their gadgets lost or stolen, according to a recent survey from Pew Internet & Pew Internet & American Life Project.
10. Use As A Camera
At its core, a decommissioned iPhone is a hard drive with a camera. Snap photos with it. No Canon needed. You can also use the iPhone to move photos and other files from one computer to another.
11. Recycle With Apple
Apple Inc.'s own recycling program will give you an Apple gift card if it is determined to have a "monetary value." A 32 gigabyte iPhone 4S with some light scratches but in good working condition was recently estimated at $280. That's higher than Gazelle, but you'll have to spend the money at Apple. The company also accepts broken phones for recycling but you won't get any money for them.