T-Mobile has agreed to pay more than $38 million in reimbursements and other benefits to New York customers after state investigators concluded the carrier broke a promise never to raise prices on certain 4G plans. The deal, announced Tuesday, covers roughly 252,957 Price Guarantee Plans statewide, whose customers signed up between January 2017 and April 2019 and later saw their rates climb anyway.
New York Attorney General Letitia James struck the agreement with T-Mobile after her office found the company had marketed the Price Guarantee as a pledge that it would never change the price of customers' plans, according to Newsday. Covered customers whose bills rose received increases in May and/or June 2024, according to the AG's settlement announcement. “New Yorkers deserve clear and honest prices, not misleading offers with hidden fine print,” James said, adding that T-Mobile “misled hundreds of thousands of New Yorkers by promising it would never raise prices on their cellphone plans, then doing so a few years later.”
How New York Built Its Case
State investigators pursued the case over T-Mobile's marketing of the Price Guarantee, according to the New York Attorney General's office. Investigators found that T-Mobile's original 2017 marketing campaign and executive interviews explicitly claimed the Price Guarantee “abolishes price hikes,” even as the company later pointed to website fine print to justify the 2024 increases, the AG's office said.
The rate hikes themselves were not unique to New York. T-Mobile's May 2024 increase was a similar earlier hike, raising monthly service rates by $5 per line on older offerings including Simple Choice, ONE, and Magenta plans, per PCMag. T-Mobile cited rising costs for a separate, later price update.
What Affected Customers Can Claim
Under the settlement, customers still on 4G phones can cancel their T-Mobile plan and receive a refund of their last month's payment plus a $25 cash card, the AG's office said. Those who choose to stay with T-Mobile instead can get a new 5G-equipped phone worth $250 or a $150 credit toward a pricier device.
Customers who had already upgraded to 5G service are eligible for a refund of their last phone bill if they cancel, but are not eligible for a free 5G phone or upgrade credit, per the settlement terms described by Newsday. T-Mobile is also barred from charging covered New York subscribers any activation, switching, transfer, or administrative fees when claiming their 5G upgrade benefits, according to Ogdensburg News — a notable protection given that wireless carriers typically charge $35 or more in such fees.
Customers who remain with T-Mobile also get a binding freeze on their monthly recurring plan charges that runs through at least May 30, 2029, the outlet reported. T-Mobile has committed to sending notices to all impacted customers within 150 days of the settlement, according to Newsday.
Penalties and the Broader Pattern
Beyond the consumer benefits, T-Mobile will pay New York $98,000, according to FingerLakes1. Many of the covered plans have more than one line.
A T-Mobile spokesperson said the company was glad the matter was resolved and remained focused on delivering value to customers, Newsday reported. The New York action lands amid wider scrutiny of the carrier's pricing practices nationally. T-Mobile was named in a federal class action filed in New Jersey in July 2024 alleging the company broke its lifetime “Un-contract” price lock after a mandatory three-year price freeze tied to its 2020 Sprint merger expired, according to Top Class Actions. The settlement required carriers to provide accurate advertising and specified offer disclosures, along with customer-service training.
The Federal Communications Commission demanded answers from T-Mobile about its plan changes, according to Android Headlines. Industry analysts cited in that report estimated the plan migrations generated roughly $576 million in additional annual revenue for the company. T-Mobile also joined AT&T and Verizon last year in a separate $10.25 million settlement involving 50 jurisdictions over misleading marketing of “unlimited” data and “free” phone offers. The settlement required carriers to provide accurate advertising and specified offer disclosures, along with customer-service training.
