Following a Fast-Track SWIFT challenge from AT&T earlier in June, the National Advertising Division of the Better Business Bureau’s National Programs last week recommended that T-Mobile discontinue or clarify the “Price Lock” claim around its 5G Home Internet service.
Impact: According to a statement by NAD, the T-Mobile price lock claim appeared in print, online, and TV advertising, with terms that appeared in fine print to clarify what that means in T-Mobile parlance; under the carrier’s definition, customers get their last month of service free if they cancel their service following a T-Mobile 5G Home Internet rate increase. Obtaining the free month requires customers to cancel their service and then engage T-Mobile within 60 days of their cancellation. Not surprisingly, that’s not how most people would define a price lock, which more commonly refers to a promise not to raise rates on customers already subscribed to a specific plan. This isn’t the first time T-Mobile’s price lock has been mentioned in recent weeks after the company moved to increase rates on some of its older mobile plans and drew the ire of customers who thought their monthly rates were locked in for the duration of their service.
In its complaint, AT&T highlighted the false and misleading nature of the price lock claim and pointed out that it’s not backed by an actual commitment to lock Internet prices, thus giving T-Mobile free rein to raise prices at any time. Of course, AT&T this month announced its own $10/mo mobile price increase (on a single line, $20/mo for multiple lines) for customers on its older unlimited plans, but without the price lock discrepancy. T-Mobile countered the AT&T position by arguing that the price lock isn’t a claim but rather represents branding for the Home Internet pricing policy it implemented in January 2024. The company further argued that its advertising does not characterize the policy as an absolute guarantee that pricing will never change. In its response, T-Mobile also described the nature of its price lock as “innovative and unique in the industry,” per Fierce Network, and said the policy makes it less likely to raise rates and risk losing subscribers.
But unfortunately for T-Mobile, NAD agreed with AT&T and found that T-Mobile’s ads engendered a “fundamental misunderstanding” of its pricing policy by implying that the price for its Internet would literally be locked in for the duration of a customer’s subscription, which actually “contradicts the main massage” of the price lock claim. Furthermore, the watchdog group pointed out that T-Mobile used smaller text to explain the terms than for the claim itself, thus making the price lock catch consumers’ attention without emphasizing what the claim actually means. To solve the problem, NAD recommended that T-Mobile either cease making the claim or elevate the terms to be part of its messaging. T-Mobile reportedly told NAD that it agreed to cooperate with the suggestions even though it didn’t view the language in the ads as misleading. But the company has since released a statement indicating it will continue to offer the “generous Price Lock benefit” while taking the NAD recommendation about clarifying the language into consideration.
The recommendation appears to apply only to 5G Home Internet, but T-Mobile also used the same price lock terminology in its mobile marketing from January 2017 through late April 2022, according to Ars Technica. That caused a bit of an uproar when T-Mobile announced price increases of up to $5/mo per line on some of its older mobile plans last month, surprising customers who thought their prices had been locked in all along. This prompted some unhappy customers to file complaints with the FCC over what they felt was a bait and switch between the commonly understood meaning of a price lock and how T
-Mobile defined it. To make thing more confusing, T-Mobile did offer a true price lock for eligible plans activated between late April 2022 and mid-January 2024, which gets forfeited if a customer migrates to a non-eligible plan.
The fallout from the price lock policy, fraught with T-Mobile’s hairsplitting language, in the wake of the mobile price increases remains to be seen. But it’s possible that on the mobile side, many T-Mobile customers may not find better options. T-Mobile 5G Home Internet customers also could look for alternative broadband options in the wake of the clarified definition of their price lock, but options there could be limited too.
