Retail

T-Mobile Sales Practices Under Fire

T-Mobile recently got called out by a labor coalition for unethical sales practices.

Change to Win (CtW), a labor federation with 5.5 million members, filed a complaint with the Consumer Financial Protection Bureau on Friday. The complaint alleges that T-Mobile puts undue pressure on its sales teams to meet unrealistic goals. To meet these goals, CtW says that employees are driven to mislead customers and enroll them in unwanted services.

Change to Win writes in its report, “T-Mobile’s high-pressure sales culture, coupled with low hourly pay for retail workers, puts employees in an untenable position where they have to choose between doing what is right for customers and meeting the strictly enforced sales metrics needed to safeguard their job and their own financial survival.”

Sales workers at T-Mobile said they felt pressure to add mobile insurance policies, additional phone lines and other services that customers didn’t explicitly ask for as a means to meet sales targets and earn commission payments.

The CtW findings were based on consumer complaints collected by the Federal Trade Commission along with interviews of T-Mobile workers and online surveys of self-identified T-Mobile employees and customers. Roughly one in three of the 2,200 T-Mobile customers in five states surveyed by CtW claimed that the company enrolled them in services without explicit consent.

Back in November, T-Mobile was targeted by complaints from CtW Investment Group, the pension fund sponsored by unions affiliated with CtW, regarding accounting and disclosure practices. CtW Investment Group had requested that the Security and Exchange Commission investigate the reporting behind T-Mobile’s non-standard accounting efforts as well as how it records and presents info tied to customers who have defaulted on phone installment payment plans.

CtW said that T-Mobile presented financial results that do not offer information about the reconciliation of those results to standard generally accepted accounting principles reporting. Information that is not illustrated and that would impact cash flow, according to the activist investor, includes shifting customers from installment plans to phone leases. Additionally, CtW alleged that T-Mobile freed up reserves set aside previously to cover defaults on phone payment plans, which helped increase stated net income.

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