Internet

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Metro’s $20 Home Internet Has No Catches?

Metro by T-Mobile is a prepaid cell service provider (formerly Metro PCS) that also offers 5G home internet. In this commercial that began running last month, they promise an unbelievable deal — only $20 a month for internet service. And they say there are no catches and no “exploding bills.”



Click arrow to play commercial

No catches? Really?

*MOUSE PRINT:

Metro fine print

In order to get the $20 internet service you have to (1) qualify for the federal Affordable Connectivity Program (ACP), (2) buy a monthly cell phone plan from Metro, (3) pay $25 the first month not $20, (4) sign up for autopay, and (5) be able to access the 5G service which is only available in certain cities/areas.

The federal program provides a $30 a month discount to those with households whose income is no more than 200% of the federal poverty level or if at least one person is on Medicaid, Section 8, or one of several other social welfare programs. Metro’s advertised $20 monthly rate already reflects that $30 discount.

On top of all that, this federal program is winding down this week and will no longer accept applications after February 7, 2024! The money for existing enrollees is expected to run out by May. And then, contrary to the Metro’s promise of “no exploding bills,” subscribers’ monthly bills will likely more than double.

Despite the FCC’s January 11 announcement of the end of the ACP program, Metro continued to run the commercials for their $20 internet service at least through January 26.

We asked Metro’s PR folks if it was fair to orally advertise “no catches” (1) when there were so many qualifications only disclosed in fine print, and (2) when the vast majority of viewers will not be eligible for the advertised price. The company responded in relevant part:

We are in the process of replacing this ad prior to the last day of sign ups. {A] key goal of this campaign [is] … to help educate millions of Americans … about a more affordable, flexible option for home internet. Of course, all the advertising always noted that ACP was eligible for “qualifying customers” in larger font.

I’m sorry, the net impression created by that ad is that Metro itself is offering $20 internet with no strings attached. The requirement of first needing to be approved for a federal program is anything but clearly disclosed (and certainly not in large type). It’s great if a company wants to promote a federal program to help lower income people with their bills, but just come out and say that’s what it really is.

In our view, then, this ad is extremely misleading as presented. We’ve asked the National Advertising Division (NAD) of Better Business Bureau National Programs to review the case.

What do you think of advertising like this?

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FTC Says TurboTax’s Free, Free, Free Ads Were False, False, False

Last week, the Federal Trade Commission issued an Opinion and Final Order against Intuit Inc., the maker of TurboTax, the most popular brand of tax preparation software, saying it had engaged in deceptive advertising practices. It had accused the company of running ads for free tax prep services for years but it appears the majority of those who signed up were not eligible for those free services. [See complaint.]

In some ads, like the one below, the word “free” is mentioned perhaps 20 times in a 30-second commercial.


*MOUSE PRINT:

The virtually unreadable fine print says that the free version is for simple returns only.

Under the FTC’s final order, Intuit has to make disclosures abundantly clear in its advertising about the limitation of their free edition.

*MOUSE PRINT:

The Commission’s Final Order prohibits Intuit from advertising or marketing that any good or service is free unless it is free for all consumers or it discloses clearly and conspicuously and in close proximity to the “free” claim the percentage of taxpayers or consumers that qualify for the free product or service. Alternatively, if the good or service is not free for a majority of consumers, it could disclose that a majority of consumers do not qualify. [Emphasis added]

Sure enough, last week Intuit began running new TV ads for TurboTax Free that unambiguously say that only about 37-percent of people will qualify to use the program free.


Whether the new ad is satisfactory to the FTC is for them to say, but it is refreshing to literally hear a company’s disclaimer rather than having to catch it in a too-quick and too-small-to-read footnote.

Since this was an internal administrative proceeding where the FTC cannot assess financial penalties, Intuit got off easy. Nonetheless, they have appealed the decision to court.

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Walgreens.com Overcharged on Sales Tax in MA

Just before the holidays, MrConsumer spotted a bargain on Royal Dansk butter cookies at Walgreens.com and ordered 10 of them for pickup at his local Walgreens just outside of Boston.

In the ordering process, he noticed that inexplicably he was going to be charged $1.79 in sales tax on them.

Walgreens tax

Food in Massachusetts is not subject to sales tax except in restaurants by law.

*MOUSE PRINT:

sales tax rule in MA

So before finalizing the order, he called the Walgreens 800 number to see if they could adjust the total to the correct amount. They could not, but said to call back after making the pickup and they would provide a credit.

Upon pickup the next day, I asked the store manager to correct the bill but he could not because it was an online order. Then I called online customer service again and asked for the credit as I had been promised the day before. “Oh, we don’t give back sales tax” was the customer service person’s response. After she started saying that they base sales tax on where the company is located — in Illinois — a total misunderstanding and misrepresentation of how sales tax works, I asked for a supervisor. All that representative was able to do was fill out a form to be sent to the Walgreens tax people for their review.

Of course, MrConsumer’s long-held belief is if a company was going to overcharge anyone, they would never choose him alone to do it to.

So I went back to the Walgreens website to try to figure out the extent of the tax overcharging in Massachusetts. I put some test purchases of various nontaxable items in my cart to see if tax would be charged. Here’s one of the them.

*MOUSE PRINT:

Walgreens taxed cookies and crackersConsumer World Photo Illustration

Sure enough, it appears for some unknown period of time Walgreens.com had been charging a 7-percent sales tax on cookies and crackers here wrongfully. And that isn’t even the right sales tax rate in Massachusetts. We pay 6.25-percent on taxable sales, while 7-percent is the meals tax rate.

After a total of four or five unsatisfying contacts with Walgreens’ 800 number and their online customer service department, four days after placing the order, they corrected the website. And the day after that, I was issued a $1.79 refund for the tax overcharge and a $50 e-gift card for bringing the matter to their attention.

tax refund

Consumer World asked Walgreens PR folks how such a taxation mistake could happen, how long they have been overcharging customers, how much money was collected, and what they were going to do to refund the overcharges. They first said that the problem was limited just to that one brand of butter cookies. But after suggesting they were minimizing the extent of the issue, further research they did revealed the problem was much broader affecting baked snack foods like Twinkies, as well as all cookies and crackers.

In a conference call with two Walgreens officials in December, the company admitted the problem was of their own doing and not of an outside contactor. They explained that they erroneously categorized certain snack foods as bakery items which they thought were taxable.

When pressed to answer the rest of our questions, they later said that they could not determine how long the overcharging had been going on, and due to system limitations, they could not make automatic refunds.

The company also provided this emailed statement which said in relevant part:

If customers believe they have been impacted and now owed a sales tax refund, please contact 877-250-5823 for assistance. We ask that impacted customers who call this number have on hand the order number found on their receipt to assist with the query. Walgreens does not profit off sales tax errors of this kind, as all tax collected is turned over to the state and local taxing authorities.

Consumer World is pleased to see that Walgreens at least fessed up to the problem and corrected it relatively quickly after our contact. We’re disappointed they can’t make automatic refunds since they already have two-years-worth of receipts right on their website. Shoppers should not have to scrutinize and recalculate the tax on every sales slip to figure out if they have been overcharged.

This is not the first time Walgreens has been accused of overcharging on sales tax. They were sued or called out for improperly charging tax on toilet paper in Pennsylvania last year, on COVID test kits in New York in 2022, on milk in Massachusetts in 2019, and on bottled water and certain unsweetened beverages in several Illinois areas in 2015 and 2017.

Many retailers have been accused of overcharging on sales tax over the years, so getting this bit of retail law correct has been a challenge for stores because of the complexity and varying nature of state and local rules.

None of that, however, excuses stores for not getting it right.