T-Mobile accounting is the target of an SEC complaint

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The Change to Win (CtW) Investment Group today filed a complaint with the Securities and Exchange Commission (SEC) about T-Mobile and some of its recent accounting practices.

CtW Investment Group works with pension funds sponsored by unions affiliated with Change to Win, a labor group that’s gone after T-Mo in the past for alleged false advertising.

According to CtW Investment Group, the way that T-Mobile reports some of its metrics don’t conform to generally accepting account principles (GAAP), and that these non-GAAP reporting may make T-Mo’s financials look better than they are and make comparisons to competitors’ earnings “impossible.”

“The SEC has put companies on notice that they should self-correct non-GAAP abuses, and we do not believe T-Mobile’s latest earnings fixed long-standing problems, and the agency’s intervention is necessary,” said Dieter Waiznegger, CtW Investment Group’s Executive Director.

CtW Investment Group also alleges that T-Mobile grew its income by $122 million from Q4 2014 to Q3 2015 with a change in its accounting estimates. Specifically, T-Mo reduced the amount of money it set aside for credit losses from EIPs, even as the risk of future credit losses grew.

“T-Mobile’s financial reporting and accounting estimates are opaque at best and deceptive at worst. Investors simply do not have the information needed to access risks and back out real quarter-on-quarter or year-over-year growth rates,” added Waizenegger. “The company refuses to give investors a transparent look into its growth and financial health.”

It’s unclear whether or not the SEC will actually investigate T-Mobile regarding its accounting practices.

I reached out to T-Mobile for a response about CtW Investment Group’s complaint, but the company declined to comment.

If you’d like to read CtW Investment Group’s full letter to the SEC, you can find it at the link below.

Source: CtW Investment Group

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  • Nobody Special

    I knew it!!!! I knew It!!!!
    So does this mean I have to give my 2 free unlimited lines back?

    T-Mobile isn’t making extra money from me really in the longterm…

    its unprecedented for me to get 4 Simple Choice Truely Unlimited Plan lines for $100 dollars anywhere…. and with the family international add-on allows all my lines to call and text unlimited domestically and call and text unlimited internationally makes the total for all my lines merely $110 Dollars WOW…..

    at these prices I can afford to get the cheapest verizon or AT&T plan since I have horrible T-Mobile reception in my house, and my WiFi calling isnt all what its cracked up to be and T-Mobile doesnt allow my phone to roam…. GOTCHA

    I can root for Two Carriers… would T-Mobile consider me to be cheating on them????
    T-Mobile will be my wife and Verizon will be the smoking hot Mistress…lol

    i am only kidding… i don’t condone cheating on your cell phone carrier :)

    • Balthazar_B

      If your home reception isn’t what you want it to be — 5 bars everywhere, all the time — just put down a $25 deposit on a T-Mo 4G LTE Personal Cellspot and call it a day.

      • Nobody Special

        I tried the cell booster (didnt work)
        and i tried the other similar device t-mobile mailed to me…. i dont remember the name of it, but it didnt work either. But I do have a ZTE mobile hotspot and when i put that in my window that gives me wifi service in the house to watch netflix, and youtube, but it doesnt allow me to connect to it to make calls. I think the coverage will improve in the next year or so and thats why i still stick with T-Mobile…

        • JR M

          In rural Gatesville, TX now I get up to 30 mbps 4G LTE, I used to need signal booster at home.

        • Uxorious

          How do you add international calling to all 4 lines for $10?

          On the “Personal Cellspot”, try it. T-Mobile will give it to you free if you’re postpaid. It uses your home Internet connection for the backhaul connection, and basically puts a cell tower in your house.
          5 bars everywhere in my house – works GREAT!

        • Nobody Special

          there were two options;

          $5 Add-on enables you to call landlines in other countries
          $10 Add-on enables you unlimited calls to over 140 countries landlines + unlimited calls to cell phone lines in other countries too , and text to these international cell phones are unlimited also. Its an awesome deal because iwas paying $15 dollars for the same service but one day during a conversation with Customer Service i was told they have a International Family Calling Add on for $10 i was confused…. she explained this covers all the phones on your account. So instead of me spending $15 for international calling and text for one phone, i can spend $10 for all lines on my account , that would instantly save me $5 dollars!!!!!! Customer service tries to switch me to the Tmobile One plan every chance they get…. so when i recently got the free 2 phone lines i had to stress every 2 minutes not to remove me from my plan….. i asked for the 2 free lines and they tried to be sneaky and put me on the Tmobile One Plan 4 phone lines for $120 dollars…. i caught on to it because i only pay $100 for 2 lines…. so if the 2 lines are free why woukd my bill become $120. She appologized and added the two lines to my current plan. If you dont know what plan you have, they will trick you the moment you blink….. if i changed my plan i would lose the $10 unlimited international talk and text add on…. then i would have to pay (if i wanted this add on for all 4 lines on my account) $60 extra a month….. so $10 a month works for me. I read almost every week what T-mobile promotions are goin on and i look for something that works for me. Now everybody are like hawks around these promotional deals but Tmobile have always been doing deals like this since i became a customer in 2008. Everybody has different plans and different perks and benefits, you have to tailor your plan to your desired needs before the promotional deals end.

          Search this title on the internet and you will find more details regarding the $10 International Family Calling add-on:

          “T-Mobile adds $10 international calling plan for your whole family”

        • Sandi

          I am customer service Rep for T-Mobile and I am so sorry you felt you we’re being tricked into switching to T-Mobile One. We don’t ever want you to feel that way. Please if it happens again ask for a supervisor we are here to help you and do what’s best for you.
          Thanks
          Concerned CSR

        • Nobody Special

          When i was with Verizon they also tried to trick, or i will use the word persuade customers to renew contracts. I understand the cell phone companies want to maintain theie subscribers and keep them forever but some of these subtle slide of hand tactics should be banned. As i said when i was with Verizon they would talk as if your contract ending was a bad thing for the consumer. Unfortunately, For people that didnt know better got sucked right back into another Verizon contract before the original one had ever expired. As for me, i knew what that meant so once my 2 year contract ended i didnt get into another one.

          I have noticed with T-mobile, within the last couple of months i was being persuaded to leave my current plan by a T-Mobile Authorized Reseller and go to the T-Mobile One Plan. Im guessing there must be some sort of compensation or bonus in it for the customer reps because i always feel like im buying a car when im on the phone with T-Mobile. There should be something in place that customers who are leaving their plan to go on to another one should be notified in advance and be allowed to refuse unwanted changes to their plan. Im used to the old switch-a-roo, so i always keep my eyes and ears oponed and i stay alert when im confronted my customer service. An authorized retailer told me one day, that my bill looked odd and that it appears that im being overcharged for services on my account, he seemed very convincing, but I merely came there for a simcard and he tried to do a jedi mind trick to get me to update my account. i left my account the way it was and told the rep im happy with my bill. He again stated we need to get to the bottom of this immediately and as he picked up the phone to call customer service i told him “leave my account the way it is, i only want a simcard” he hung up the phone and finally gave me the $20 sim card i was asking for. He then told me if i switched to the T-mobile ONE plan i would save a whole bunch of money easily every month. I think he thought i was stupid, or something, i let him finish his long speech, i let him write down on a scrap sheet of paper how much money i will save from switching from my Simple Choice $100 promo plan. And when he was done, I went online to view my T-mobile account using my iPad and i showed him all the services i was getting and the amount I was paying. If i had listened to him I would of ended up paying more because of my Family International addon Promotional Plan im on, and i have a bunch of tablet lines on the account. Im a smart cookie usually and i always have my guard up when it comes to situations like these.

          Im just praying customer service didnt mess up my plan when i recenlty took advantage of the free 2 line promotional deal i signed up for. Because i toldthem several times not to change my plan, but if i see my plan has been changed other than me receiving two (2) free phone lines, i will be so angry….. and i will call Customer Service up immediately to try and change it back!!!

        • Sandi

          Okay you’re right the 4 lines for $100 is definitely a better deal, so anything that I can think of that they may have offered it for was to be able to give you unlimited data, but there is no commission or bonus for switching over to the T-Mobile one rate plan, I promise you that. The most awesome thing about being with the uncarrier is you can keep your rate plan for as long as you absolutely want to because we have no contracts.
          Thank you so much for your feedback and it will not be unheard definitely going to send it up the ladder

        • Nobody Special

          i will try the cell booster again i guess….. thanks

        • Nobody Special

          the $10 international family addon was only available for customers to subscribe to it in 2014. January 2015 the promotion ended. T-mobile may bring the promotion back, its not impossible at all for em to bring it back.

    • Aaron Davis

      If your phone isn’t roaming (within the US) that is not T-mobile’s fault. It is either a problem with your phone (doesn’t support any of the available bands), or the local provider isn’t letting you in.

      • Nobody Special

        Are you sure? i have read somewhere that T-mobile can prevent the phones on their network from connecting to roaming networks if they have an established tower in the area. I have to admit, the tower in town works well in town, but my house I guess is approximately 1 block away from a stable coverage.

        I will contact T-mobile in the next month or two concerning the ability to roam.

      • Glen Baerett

        Yeah, Roaming never worked correctly on T-Mobil’s network. It’ll usually say “System Busy” or “Call Failed”.

    • Glen Baerett

      T-Mobil invented Cheating on Verizon and AT&T. People with T-Mobil are also more apt to spend more than AT&T customers.

  • maanshu

    :(

    • Glen Baerett

      Yeah. T-Mobil is only activating sub-prime credit customers now and about 4.2% of those customers are classified as “bad debt” according to the documents.

      That’s bad news for T-Mobil investors and I also fear for the safety of its employees. If coverage doesn’t work, the likelihood of a customer bringing a gun to the store to complain about coverage is getting higher. Soon, T-Mobil will need to insure its customers and employees.

      • Andrew Singleton

        we’re already insured ;)

      • Bradley Karas

        Oh my god! LOL you’re crazy

  • Mike

    T-Mobile is not in any trouble of closing but I do believe they’re doing a lot of promos to grow the subscriber base which will help T-Mobile get top dollar when they do sell the company

  • samsung freud

    The report makes for interesting reading.
    Especially on page 7:

    We believe TMobile is beginning to face network capacity challenges that may constrain its ability to maintain momentum in the marketplace
    , … [and that we] will be at acompetitive disadvantage and possibly experience erosion in the quality of service in certain markets if we fail to gain access to necessary spectrum..

  • Glen Baerett

    Well, here’s the thing– T-Mobil for years has only provided service on a Macrocell network which is cheaper to maintain, but the coverage doesn’t get over small hills and into valleys. Coverage may actually exist in areas on the map, but the service itself might verywell be 100 or 200 feet above the ground. This is why if you go outside or on your roof the service may work. So with T-Mobile, customers who are satisfied with old analog-era 2G macrocell technology means huge profit margins; and greater than Deutche Tekekom will ever see in Europe. “Americans” (and I use the term loosely) who work at the company send most of the profits to Germany in an effort to maintain old decrepit aluminum-wire based network instead of upgrades to American cellular properties. Deutsche Telekom doesn’t even own cell tower leases in the US anymore.

    Also and to a large extent, the German-based aluminum wiring strategy is relavent to Germany’s approach to the US. I remember when John Ledger got in a twitter fight with President-Elect Donald Trump about coverage in Trump Hotel, and T-Mobil’s John Ledger (whom was just fine happy with crappy WiFi calling) didn’t want to invest in coverage. Even Germany couldn’t give John Ledger the ability to fix coverage in the President-Elect’s hotels. John Ledger checked out of the Trump hotel early; probably to go to a dive bar because he had budget for that.

    So the problem is that T-Mobil’s coverage versus a network that uses micorcell and picocells will always be better and higher quality connections. These are the types of services T-Mobil doesn’t want to invest in.

    Most of the macrocell towers were built in the 1990s when money was cheap to obtain, and others became billionares on German Cash instead of investing in coverage. Great for them and customers who can’t tell the difference. Then there’s low-quality fruit like Neville Ray who are still working there. Wouldn’t it be great to retire on the beach and have something better than T-Mobil coverage? I think so.

    For everyone else, T-Mobile has a service which also comes with a CEO-In-A-Box who wants to complain about everything except the coverage it offers.

    It’s about time to make John Ledger stand up for something… anything he says that’s true because his coverage is terrible, and most importantly, he said he was going to “be on another planet” when Trump is elected. It’s amazing any customer believes any word that comes out of his mouth; especially coverage and service speed. T-Mobil even hired Andrew Christou’s ad agency and also Steve Harvey to say inaccurate things that can be proven wrong. So what we know is that Andrew Christou can be personally bought off to make ads based on inaccurate claims too.

  • Bradley Karas

    How does this affect any of us?

    • Nobody Special

      we are passengers on a huge pink bus and T-mobile is driving. If tmobile gets affected by all this worldly problems we are affected to because we are riding along. if tmobile goes bankrupt what do you think will happen to your fabulous plan?

      • Bradley Karas

        T-Mobile isn’t going bankrupt LOL very dramatic of you though

      • Bradley Karas

        This is merely a reporting reg issue on bad debt allowance…more an investor reporting issue and is merely a paper write off for them

  • bessie.whiddon

    After 5 years I decided to leave my last job and I am so happy now… I started doing work from my house, for this company I stumbled upon over internet, several hours daily, and I earn much more than i did on my office work… My last month pay-check was for 9000 dollars… Amazing thing about this is that now i have more time with my family… TINY.PL/g9s36