T-Mobile promised to 'never change the price you pay' — then hiked rates. New Yorkers just got back $38M in value

A $5 price hike in 2024 will cost T-Mobile (NASDAQ:TMUS) a "reimbursement" agreement of "$38 million in value" for New York customers, state Attorney General Letitia James' office announced on Oct. 20. And it all stems from T-Mobile's pledge to 4G customers to "never change the price you pay" via their "Price Guarantee Plans" between 2017 and 2019.

The AG's office says that, in 2024, T-Mobile did change their price — upping it by around $5 for each phone line. They added that "T-Mobile hid terms in fine print on its website that supposedly gave it the right to raise customers' rates," violating New York law around "hidden or fine print disclaimers," while impacting more than 250,000 state phone plans.

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"New Yorkers deserve clear and honest prices, not misleading offers with hidden fine print," James added in the announcement. "Consumers shouldn't have to pay the price for a misleading sale."

James' office told Moneywise they started investigating T-Mobile's price hikes in 2024 and that the reimbursement doesn't mean the company is cutting a $38 million check. Rather, they said, it's an expression of the value of the offers available for those who qualify.

T-Mobile essentially told Moneywise the same, noting that the $38 million is "not the amount in refunds or payments."

What, then, does the $38 million "in value" mean for the customers who had their prices hiked?

The attorney general's office noted that the $38 million is the maximum value of the benefits impacted customers can choose as a reimbursement.

For example, according to the settlement agreement , those eligible customers who choose to cancel their plans could receive "T-Mobile's payment of their last month's recurring charge and a $25 cash card."

Eligible customers who stick with T-Mobile can choose from "either a free or discounted 5G-equipped wireless phone for each line experiencing less than 5G service," along with T-Mobile's promise "not to increase the monthly recurring charge on the account's current plan until no earlier than May 30, 2029."

Any other affected customers can either cancel and have T-Mobile pay their last month's bill or stay and accept T-Mobile's promise of not increasing monthly recurring charges until May 30, 2029.