NAD Finds T-Mobile Can Support Broadcast Advertising for ‘Jump’ Program, Recommends Company Modify Website

New York, NY –March 13, 2014   – The National Advertising Division has determined that T-Mobile USA, Inc., can support certain advertising claims for the company’s “Jump” program. However, NAD recommended the company modify its JUMP website to more clearly disclose deductibles that may apply if one’s phone is lost, damaged or stolen.

The claims at issue were challenged by Sprint Corporation.

NAD is an investigative unit of the advertising industry’s system of self-regulation.  It is administered by the Council of Better Business Bureaus.

Sprint contended that television and website advertising for “JUMP” implied that:

•    With the JUMP program, a consumer could receive an upgraded phone, up to twice per year, at the same discounted price as a new T-Mobile customer even if a phone is damaged, lost, or stolen
•    The JUMP program costs only $10 per month
•    No additional fees apply even if a phone is damaged, lost, or stolen.

NAD noted that the challenged television commercials were designed to introduce consumers to the JUMP program, but did not state or imply any message regarding the cost or terms and conditions of JUMP.

Each of the challenged television ads, NAD noted, included a sketch that depicted a phone breaking in a comical scenario. At the close of the humorous vignette, an announcer stated: “Two years is too long to wait. Introducing JUMP! from T-Mobile. The freedom to upgrade when you want, not when you’re told.”

Similarly, NAD noted, the challenged radio advertising did not address price. Further, the
announcer in both radio advertisements stated explicitly that a “deductible may apply.”

NAD concluded that the advertiser was under no obligation to inform consumers about the deductibles in either the introductory radio or television advertisements. However, NAD reached a different conclusion following its review T-Mobile’s JUMP website, which introduced the concept of JUMP and explained in three steps how the program works:

•    “1. Buy a new smartphone on the Simple Choice Plan using our equipment installment program.
•    2. Add JUMP! for $10 a month when you add Services to your order.
•    3. Upgrade as soon as six months after enrolling in JUMP!, simply by trading on your current phone, up to two times every 12 months.”

Directly below the three-step list was the following:  “And with JUMP!, you’re protected if your phone is lost, damaged, or stolen with the included Premium Handset Protection and Lookout Mobile Security.”

NAD was concerned that T-Mobile’s “$10 a month” claim appeared together with the claim regarding protection for damaged, lost or stolen phones and determined that a reasonable consumer could take away the message that he or she could be “protected” for “$10 a month,” even if his or her phone was lost or damaged.

Given the significant deductibles that could apply in the case of a lost or damaged phone, NAD determined that the website should clearly and conspicuously disclose the existence and amount of the deductibles that may apply and found that the small-font disclosure at the bottom of the site was not sufficiently prominent.

NAD recommended that T-Mobile revise its website by either discontinuing its references to broken, lost, or damaged phone – or by modify the claim to better alert consumers to the existence and amounts of applicable deductibles.

T-Mobile, in its advertiser’s statement, said that the company will clarify its website “consistent with NAD’s recommendation.”