National Advertising Division Recommends that T-Mobile Discontinue Certain Challenged Claims Comparing TVision Television Service to Cable TV, Following Charter Challenge
NEW YORK, Feb. 4, 2020 /PRNewswire/ -- The National Advertising Division (NAD) recommended that T-Mobile US, Inc. discontinue certain challenged claims for its TVision television service in its TVision website and a press release (including a video advertisement of limited duration that was part of the press release), following a challenge by competitor Charter Communications, Inc.
NAD is an investigative unit of the advertising industry's system of self-regulation and is a division of the BBB NP's self-regulatory and dispute resolution programs.
T-Mobile's TVision service is TV delivered via an interconnection with a customer's wired broadband service (with plans to deliver the service over T-Mobile wirelessly in the future). TVision is being marketed as a replacement for cable at a price point of $90 per month, a premium price as compared to competing services or streaming services such as Netflix or Hulu. At issue was whether, as argued by Charter, the challenged advertising for TVision makes falsely disparaging claims against cable television and fails to disclose material terms regarding T-Mobile's own service.
NAD first assessed several claims about cable technology which were made in T-Mobile's video advertisement. The challenged video advertisement described the wiring in and around the cable television set as "a rat's nest of devices and wires," but NAD noted that T-Mobile's service requires the same number of wires as cable TV service. Further, T-Mobile's TVision service requires a set top box and an internet connection (with a modem and a router). Because the advertiser provided no support for the claim that cable TV requires "a rat's nest of devices and wires" and the related implied claim that Charter's cable services, and those of all other cable providers, require consumers to have numerous wires, NAD recommended that these claims be discontinued.
The challenger also argued that T-Mobile's video implies that its TVision service is wireless. NAD noted that in the advertisement the set top box is shown with a single wire in action shots (although it is not prominent), and shown with no wires in product shots. In addition, the advertisement does not state that the service is wired and does not display the wires required to connect TVision, and T-Mobile is primarily known as a wireless company. NAD determined that the disclaimer, "Home connectivity and connected set top box required," does not communicate that the set top box requires a wired connection (as telecommunications connectivity can be wireless), nor is it clear and conspicuous. Thus, NAD recommended that T-Mobile discontinue the implied claim that its service is wireless, for example by showing TVision's three wires or by using a clear and conspicuous disclosure which discloses that three wires are required.
Further, with regard to the claim that all cable companies offer a "crappy cable interface" (referring to the on-screen menu of channels), NAD noted that the advertiser provided no information about the interfaces of other cable companies. Therefore, NAD determined that the denigrating claim is not truthful, accurate, and narrowly drawn, and recommended it be discontinued. In addition, NAD noted that T-Mobile's claim that cable offers "outdated technology" refers to the "rat's nest of devices" and "crappy cable interface" claims, which NAD found unsubstantiated. Thus, NAD recommended that T-Mobile discontinue the claim that cable offers "outdated technology" as evidenced by the "rat's nest of devices" and "crappy cable interface" claims. NAD also recommended that T-Mobile discontinue the express claim that with TVision "[w]atch whatever you want, whenever you want" because the use depicted in the video advertisement (i.e. viewing content on a mobile device) is not currently available to any consumer.
Next, NAD considered several challenged claims about TVision's pricing and contracts, and claims about cable contracts. With regard to the statement in T-Mobile's video that TVision offers "no annual contracts or hidden fees. Just clear and simple pricing" and the "no hidden fees" language on TVision's website, NAD determined that a consumer could reasonably take away the message that the advertised price is the total monthly bill. NAD noted, however, that TVision's advertised monthly price does not include the cost of a cable box, without which customers cannot watch television. While the challenged press release states that those who are already T-Mobile customers receive a $9.99 per month credit to cover the cost of a cable box, NAD noted that T-Mobile had not committed to making this credit permanent and that it did not apply to all consumers. Thus, NAD recommended that T-Mobile discontinue its "no hidden fees" claim as long as T-Mobile charges fees that are not included in the advertised price. Charter argued that T-Mobile should disclose the price of home internet service as part of the list price of TVision service, but NAD determined that although home internet service is required in order to obtain TVision service, it is not part of the TVision product and did not need to be included in the list price of TVision service. However, NAD recommended that T-Mobile disclose the home internet service requirement, clearly and conspicuously.
Further, NAD determined that the claim "Connect and watch in any room" reasonably conveys the message that TVision customers can "connect and watch in any room" without needing additional equipment or incurring other costs. However, NAD noted that TVision customers need Lite Boxes to connect and watch in any room, and T-Mobile's website did not disclose the pricing of Lite Boxes. Therefore, NAD cautioned the advertiser that, should it run the "connect and watch in any room" claim again, it clearly and conspicuously disclose both that consumers would need Lite Boxes to do so and disclose the pricing of the Lite Boxes.
NAD also assessed a series of express and implied comparative pricing claims including, for example, in the challenged video advertisement where a T-Mobile representative asks why customers put up with "sneaky pricing." NAD noted that comparing T-Mobile's pricing practices with that of the cable industry requires support both about the practices of the cable industry and how T-Mobile is different. NAD concluded that the implied comparative message about TVision's pricing as compared to cable was broader than the support provided by the evidence in the record. Therefore, NAD recommended that T-Mobile discontinue the implied comparative claims that Charter and all other cable service providers engage in sneaky pricing tactics.
Finally, NAD recommended that the advertiser discontinue the challenged comparative express and implied claims that cable providers have "abysmal" and "crappy" customer service. As support for its claims, T-Mobile relied on ACSI Reports measuring consumer satisfaction with cable providers and their call centers. However, NAD noted that there was no evidence in the record about TVision's customer service, nor could T-Mobile rely on its customer service rating as a wireless provider to show that consumers will be satisfied with the customer service of TVision (a new and entirely different product).
In its advertiser's statement, T-Mobile stated that it "agrees to comply with NAD's recommendations" and that "TVision is a relatively new product and its manner of delivery and other features and services available to TVision customers are evolving, as is our advertising for the service. We appreciate NAD's recognition of this fact."
About the National Advertising Division: National Advertising Division (NAD), a division of BBB National Programs, provides independent self-regulation overseeing the truthfulness of advertising across the U.S. NAD reviews national advertising in all media and its decisions set consistent standards for truth and accuracy.
About BBB National Programs: BBB National Programs fosters trust, innovation, and competition in the marketplace through the development and delivery of effective, third-party self-regulation, dispute resolution and other programs. BBB National Programs is the home of industry self-regulatory and dispute resolution programs that include the National Advertising Division (NAD), National Advertising Review Board (NARB), BBB EU Privacy Shield, BBB AUTO LINE, Children's Advertising Review Unit (CARU), Children's Food and Beverage Advertising Initiative (CFBAI), Children's Confection Advertising Initiative (CCAI), Direct Selling Self-Regulatory Council (DSSRC), Digital Advertising Accountability Program (Accountability Program), and the Coalition for Better Advertising Dispute Resolution Program (CBA DRM). The programs are designed to resolve business issues and advance shared objectives by responding to marketplace concerns to create a better customer experience. To learn more about industry self-regulation, please visit: BBBNP.org.
SOURCE BBB National Programs; National Advertising Division
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