T-Mobile Settles New York Lawsuit Over Misleading Price Guarantees

New York Attorney General Letitia James announced a settlement with T-Mobile US, Inc. following an investigation into misleading pricing for 4G cellular plans. Between 2017 and 2019, the company advertised a Price Guarantee Offer promising that rates would never change, but it increased monthly costs by approximately $5 per line in 2024.

The settlement provides more than $38 million in value to roughly 252,957 affected New Yorkers. Eligible 4G customers can choose to cancel their service for a refund of their last month's payment and a $25 gift card, or remain with the company to receive a free 5G phone valued at $250 or a $150 credit toward a more expensive model. Those who stay are guaranteed no price hikes until at least 2029.

Customers who already upgraded to 5G may cancel for a final month's refund or remain on their plans with a rate freeze through 2029. T-Mobile must also pay approximately $98,000 to New York State and clearly disclose any future price guarantee exemptions. The company is required to notify all impacted customers within 150 days.

Investigators determined that T-Mobile used hidden fine print to justify the price increases, a practice the Attorney General's Office ruled did not excuse the misleading promises made to consumers.