T-Mobile fights to keep misleading ad claim on customer savings

The phone carrier plans to fight back against a major challenge from a top competitor.

May 21, 2025 - 18:08

T-Mobile fights to keep misleading ad claim on customer savings

T-Mobile (TMUS) recently suffered a major loss in its challenge to fight an accusation made by one of its top competitors, Verizon. In advertisements, T-Mobile allegedly misled customers regarding how much money they could save.

Last year, T-Mobile's ads claimed customers could save 20% if they switched from Verizon.

T-Mobile made this claim in two commercials: “Holidays Are Coming in Hot: Families: Save 20%” and "Top Three Plays of the Day." It also made the claim in a brochure titled "Save on Every Plan” and in its Savings Calculator on its website, as well as in a press release.

Verizon later challenged this savings claim by filing a complaint with the Better Business Bureau National Programs’ National Advertising Division (NAD).

T-Mobile had to answer to the BBB National Programs’ National Advertising Division about claims made in ads.
Image source: Anna Moneymaker/Getty Images

T-Mobile gets a rude awakening

While the NAD investigated, T-Mobile told the division that it modified its advertising to clarify that customers can achieve these savings through the cost of plans and the value of perks, such as free streaming services.

However, according to a May 19 press release, the NAD recommends that T-Mobile “discontinue” its 20% savings claims, since customers are not likely to expect the value of perks to be included in these savings.

“NAD determined that, despite T-Mobile having modified the savings claims to explicitly reference streaming services, one message that continues to be conveyed is that consumers who switch to T-Mobile from Verizon can save 20%, and that those savings are achieved through plan costs alone,” said the NAD in the press release. “NAD found that consumers are not likely to expect the value of ancillary benefits to be included in a savings comparison.”

The division also discovered that T-Mobile’s updated messaging fails to “clearly and conspicuously inform consumers that the 20% savings claim is based on the cost of the plan, additional optional fees for third-party streaming services, and is contingent on purchasing three lines of service at a specific tier.”

It also found that the disclosure stating consumers need to purchase three phone lines is unclear and “contradicts the message of the broad comparative savings claim.”

In response to the NAD’s recommendation and findings, T-Mobile stated it “is disappointed with NAD’s decision and will appeal it.”

T-Mobile battles recent decline in phone customers

T-Mobile’s choice to appeal the NAD’s decision comes during a time when it has recently been experiencing weaker consumer demand for its phone services.

In its latest earnings report, T-Mobile revealed that it added 495,000 new postpaid phone customers during the first three months of 2025, which is 6% lower than the number it welcomed during the same time period last year.

Also, T-Mobile’s postpaid phone churn, the number of customers who cut their phone service, increased by 5 basis points year-over-year.

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The loss in phone customers comes after it issued several price hikes for some of its older phone plans, which frustrated customers.

T-Mobile is also facing increased competition from competitors such as Verizon and AT&T, which have been rolling out generous offers to attract price-conscious customers amid inflation and concerns about the economy.

“So overall, you saw across the industry churn was just on the margin a little elevated, and I think there’s a number of dynamics there,” said T-Mobile CEO Mike Sievert during an earnings call last month. “That probably has more to do with kind of macro questions than with competition. You know, I think there’s a certain element out there where people are in a time of uncertainty about the future, grabbing what they can afford now. And so, you’re seeing kind of some amount of probably move forward of upgrades and switching.”