T-Mobile advised to quit using ‘price lock’ claim


  • T-Mobile has been advertising a home internet “Price Lock” guarantee in print, online and TV spots
  • AT&T challenged the claim through the National Advertising Division (NAD), an industry watchdog group
  • NAD says T-Mobile has agreed to comply with the decision

An advertising watchdog group told T-Mobile that it should stop using the “Price Lock” claim in its advertising for its 5G home internet service or explain what “Price Lock” really means.

The decision from the National Advertising Division (NAD) came after AT&T brought a complaint. NAD is part of the BBB National Programs, which oversees self-regulation programs for the ad industry.

NAD said T-Mobile has agreed to comply with NAD’s recommendation. But the carrier’s own statement, as quoted by NAD, isn’t so clear-cut: “While T-Mobile believes the challenged advertisements appropriately communicate the generous terms of its Price Lock policy, T-Mobile is a supporter of self-regulation and will take NAD’s recommendations to clarify the terms of its policy into account with respect to its future advertising.”

The challenged “Price Lock” claim appeared in print, online and TV ads, including a commercial featuring actors Zach Braff, Donald Faison and Jason Momoa performing a “Flashdance” number. The actors didn’t sing about T-Mobile’s 5G internet service pricing, but text appeared on the screen about a price lock.

Typically, if you see the words “price lock,” you figure the price won’t change, right? But what it really means for T-Mobile internet customers is they get their last month of service free if T-Mobile ever raises the rate, i.e., not quite the same thing as “price lock.”

AT&T had argued that the “Price Lock” claims are false because T-Mobile isn’t committing to locking the pricing of its service for any amount of time. AT&T also pointed out that T-Mobile’s disclosures contradict the “Price Lock” claim because they set forth limitations that make clear that T-Mobile could increase the price of service for any reason at any time.

The advertising organization agreed. “NAD found that a disclosure that ‘Price Lock’ does not lock the price but gives customers one month of free service if certain conditions are met contradicts the main message of the ‘Price Lock’ claim,” according to a press release.

What T-Mobile said

Still, it’s interesting to note T-Mobile’s argument for making the “Price Lock” claim. According to NAD, T-Mobile contended that “Price Lock” is not a claim, but the name of a pricing policy it implemented with respect to its home internet service as of January 2024.

The policy is that if T-Mobile raises the price of its internet service, the consumer may cancel their service and get the last month of service for free, so long as they let T-Mobile know of their intention to cancel within 60 days of the price increase.

T-Mobile argued that the advertising in question doesn’t reasonably convey a message that the “Price Lock” policy is an absolute guarantee and promise that the amount customers pay for home internet service will never change under any circumstance and for all time.

According to NAD, T-Mobile submitted that its home internet service “price lock” is “innovative and unique in the industry,” serving as a disincentive for T-Mobile against raising rates.

Generous terms?

At any rate, T-Mobile told NAD it will comply with its decision, although it believes that the challenged advertisements “appropriately communicate the generous terms of the Price Lock policy,” according to NAD. 

Last month, T-Mobile informed customers of its mobile service that it would be raising prices on some of its oldest rate plans due to rising costs and inflation. Some customers were enraged because they thought they thought they had signed up for a life-long plan that locked in their rates.

T-Mobile customers on Reddit recently called out the “un-carrier” for some epic marketing mumbo jumbo and for fiddling with service terms and conditions.

 



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