Phone Arena reports (link below) T-Mobile will face fraud allegations, including deceptive practices, following a ruling by the New York State Supreme Court.
The suit alleges that T-Mobile conspired with the third-largest operator of T-Mobile stores, Arch Telecom, to close the minority-owned locations. The original filing submitted to the court said, “Arch Telecom attempts to close the Plaintiffs’ stores for absolutely zero compensation, depriving them of their livelihood and disgorging them of their investments.”
The documents add,
“The Plaintiffs are essentially community-based T-Mobile stores, and they are what T-Mobile and Arch Telecom prefer to call ‘Sub-Dealers.’ T-Mobile and Arch Telecom hold the latter out to be a ‘Master Dealer.’ Using its operating standards, T-Mobile controls substantially every aspect of the Plaintiffs’ business.” The filing mentioned how the Plaintiffs allege that when an Arch director who acted on behalf of T-Mobile approached a minority store owner, he told the latter that he had “the option of either giving the store to Arch Telecom or simply being forced to close.”
Part of the court filings dealt with comments made by then T-Mobile CEO John Legere who said when T-Mobile announced its acquisition of Sprint, “We’ll build hundreds of stores.” The court agreed that Legere’s comments were promissory, related to potential future actions, and cannot be used to claim that fraud was committed. However, the allegations of fraud against T-Mobile also come from the carrier allegedly requiring the Plaintiffs to renovate their stores and renew leases without telling the Plaintiffs that the sub-dealer program they were part of was going to be terminated.
In addition, the date of such terminations, which were released to the Plaintiffs by Arch withT-Mobile‘s knowledge, was earlier than the termination dates set byT-Mobile. As a result, the Plaintiffs were worried that their stores were in imminent danger of getting shut down so they agreed to sell them to Arch at terms that gave the defendant a big discount.
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