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T-Mobile is being sued by New York City over sales tactics

The city alleges the carrier sold used phones as new and destroyed customer credit scores.

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T-Mobile is being sued for alleged violations of consumer protections laws.

ALASTAIR PIKE/AFP/Getty Images

New York City is suing T-Mobile, alleging the carrier violated consumer protection laws. According to the lawsuit filed Thursday in the New York County Supreme Court, T-Mobile allegedly sold used phones as new and put customers on expensive financing plans without their consent.

The lawsuit also alleges it overcharged customers, didn't provide them with legal receipts and deceived them over its refund policy.

T-Mobile has sold used phones as new at least 21 times in the last three years, according to the Department of Consumer and Worker Protection (DCWP). The carrier also adds hundreds of dollars to advertised prices by partnering with third-party financing companies like SmartPay, a press release from the city alleged, and some customers e-sign the leasing contracts without knowing this.

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Metro by T-Mobile stores are "scamming New Yorkers into buying used phones, tacking on additional costs, enrolling them in financing that's destroying their credit, and then trapping them with their deceptive return policy and incomplete receipts," said Lorelei Salas, DCWP commissioner.

"Companies that blatantly scam New Yorkers must be held accountable," New York City Mayor Bill de Blasio said Thursday.

Customers are also being charged "illegal taxes, mystery fees and fees for unwanted services," the city alleged.

T-Mobile is taking the allegations "very seriously" and is investigating, a spokesperson said in an emailed statement.

"What we are seeing alleged here is completely at odds with the integrity of our team and the commitment they have to taking care of our customers every day," the T-Mobile spokesperson said.

The state of New York is leading the charge to oppose T-Mobile's merger with Sprint, with 17 attorneys general joining New York Attorney General Letitia James' lawsuit to block the deal. 

The lawsuit now includes New York, California, Colorado, Connecticut, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, Texas, Illinois, Virginia, Wisconsin, Oregon and the District of Columbia. 

The US Justice Department approved T-Mobile's $26.5 billion bid to merge with Sprint in July after the deal was OK'd by the Federal Communications Commission in May. T-Mobile said previously that it wouldn't proceed with closing the deal until it settles the concerns of the state attorneys general.

Originally published Sept. 5, 11:42 a.m. PT.
Update, 12:22 p.m.: Adds statement from T-Mobile.