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The Big Apple is suing T-Mobile and alleges the third-largest U.S. mobile phone company scammed consumers with tactics like selling used phones as new and using deceptive return policies.
The lawsuit filed in state Supreme Court in Manhattan Wednesday follows a yearlong investigation alleging the company and more than 50 of its Metro by T-Mobile stores around New York City violated the city's consumer protection law thousands of times, according to a news release.
“Companies that blatantly scam New Yorkers must be held accountable,” Mayor Bill de Blasio said in statement. “We are doing everything in our power to make sure that T-Mobile ends these deceptive practices and that customers who were taken advantage of get the restitution they are owed.”
Metro by T-Mobile is the wireless carrier's prepaid phone brand and previously was known as MetroPCS.
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In an email, T-Mobile said it was taking the allegations "very seriously" but couldn't comment on the specific claims. The company said the accusations are "completely at odds with the integrity" of its team and the commitment they have to taking care of its customers.
The city said in its news release that it wants T-Mobile to "stop all illegal activity, to forfeit the revenue gained from the deceptive practices so that the court can create a restitution fund for victims," pay penalties and to notify credit bureaus that the financing contracts were fraudulent.
According to the city's lawsuit, T-Mobile’s deception practices include:
• Tricking customers into buying used phones. The city says it “received a stream of complaints from consumers who paid hundreds of dollars for new phones but were unknowingly sold used phones.”
• Deceiving customers about financing. The city alleges the terms of contracts “typically add hundreds of dollars to the advertised price.”
• Charging consumers illegal taxes, mystery fees, and fees for unwanted services.
• Deceptive return policy. The city said T-Mobile’s return policy is misrepresented on the Metro-branded website and claims phones have a “30 day guarantee,” while the fine print says phones bought in-store must be returned within seven days.
• Failing to provide legal receipts.
Contributing: Associated Press
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Fed Reserve Chair Jerome Powell participated in "The Economic Outlook and Monetary Policy" panel discussion event hosted by the Swiss Institute of International Studies at the University of Zurich. During the Q and A portion of the discussion, a reporter asked Jerome Powell about the effects of Trump's critical tweets of the Feds. #FoxBusiness
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The pharmaceutical industry is ratcheting up its fight against the Trudeau government’s efforts to reduce prescription-drug prices, launching a second legal challenge to an overhaul of the agency that controls those prices.
Innovative Medicines Canada (IMC), the industry group for makers of brand-name drugs, and the Canadian branches of 16 pharmaceutical companies filed an application for a judicial review of the plan in Federal Court on Friday.
IMC and the companies argue the federal government did not have the authority to fundamentally alter the role of the Patented Medicine Prices Review Board (PMPRB), the agency that sets ceiling prices for drugs, through a package of regulatory amendments adopted last month.
The new lawsuit comes on the heels of a constitutional challenge filed in Quebec last month by six other drug companies, including Merck Canada Inc., Janssen Inc. and Boehringer Ingelheim Canada Ltd.
“This industry lives and breathes to save lives," Pamela Fralick, the president of IMC, said in an interview on Friday. "But [pharmaceutical companies] do need a workable business model in order to do what they do best, which is create innovative medicines. Canada is simply not creating that sustainable environment.”
Prime Minister Justin Trudeau and his government have vowed to reduce drug prices, partly as a precursor to a national pharmacare proposal that is expected to be a key feature of the Liberals’ re-election pitch this fall.
A spokesman for Health Minister Ginette Petitpas Taylor declined to comment because the matter is before the courts.
Canada’s sticker prices for brand-name drugs are the third or fourth highest among the countries of the Organization for Economic Co-operation and Development, depending on how prices are measured.
High-priced new medications are putting particular strain on provincial and federal drug plans, which together saw their expenditures rise by $2-billion between 2014-15 and 2017-18, according to a PMPRB report released on Thursday.
During the same three-year period, government drug plans – which generally cover the poor, seniors and patients who have very high drug bills – had a 19.3-per-cent increase in costs for medications with an annual price tag of $10,000 a year or more.
Amir Attaran, a professor in the faculties of law and medicine at the University of Ottawa, called the legal action a “Hail Mary” from an industry chafing against tighter regulations and the prospect of lower profits.
“This lawsuit has an infinitesimal chance of success," he said of the claim filed on Friday, "but it’s still dangerous … particularly at a time when pharmacare is on the tips of our tongues.”
Created in 1987, the quasi-judicial Patented Medicine Prices Review Board was designed to be a check against drug companies charging excessive prices at a time when Canada was beefing up patent protections for prescription medications.
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The agency measures Canada’s drug prices against those of seven other well-off countries, including the United States and Switzerland, which today have the highest prices in the world.
The regulatory amendments that the Liberal government passed on Aug. 21 would remove the U.S. and Switzerland from the list of comparator countries and add six countries with lower prices.
The changes would also empower the board to take into account a drug’s value for money and other economic factors when setting maximum prices.
The new rules are scheduled to take effect on July 1, 2020.
Ms. Fralick of IMC said the new approach lacks “balance," and could lead to price cuts so deep they would dissuade pharmaceutical companies from applying to sell new medications in Canada.
In their application for a judicial review filed on Friday, IMC and the 16 companies, including AbbVie Corp., Eli Lilly Canada Inc. and Pfizer Canada ULC, contend the federal government overreached when it fundamentally altered the purpose of the PMPRB through regulatory amendments instead of changing the Patent Act, the legislation that gives the agency its powers.
“At best, it’s kind of a delay tactic," said Colleen Flood, director of the University of Ottawa Centre for Health Law, Policy and Ethics.
"Even if they succeed, there’s nothing, as far as this claim goes, to stop the government passing legislation to amend the Patent Act. I’d say this is an attempt [to delay] hoping there’s a change of government.”
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Canadian cannabis producer CannTrust has just decided to restructure its workforce after several problems with their product and the way it is produced. 180 jobs have been cut since Health Canada has cracked down on the company for growing illegal pot in an unlicensed greenhouse, among other concerns. The CannTrust probe has resulted in the Ontario Cannabis Store returning almost $3 million worth of weed to the company.
Last week, Health Canada deemed CannTrust's Vaughan manufacturing facility non-compliant with the federal regulator's standards. This happened after they discovered in July that CannTrust was using rooms in an unlicenced greenhouse to grow cannabis at their location in Pelham, Ontario.
Bloomberg reported that Canntrust staff brought black market seeds into the growing facility at Pelham, Ontario. Their sources say that employees brought in as many as 20 illegal strains and changed their names to those that the company was licensed to sell.
Over a thousand illegal plants were grown and flowered at CannTrust's facility. It is unknown how many of the plants were actually sold, but Bloomberg spoke with sources with direct knowledge about the operations.
These sources said that several unauthorized strains re-labelled under the “Cannatonic” strain entered the recreational market. "Citradelic Sunset" and "Code Black OG" were among the illegal strains that were relabelled.
“I can guarantee you they would harvest [plants that originated from black market seeds], trim them and send them out … Guaranteed, they went to the legal market. I can tell you 100 per cent they did,” one of the sources said to Bloomberg.
Under the Cannabis Act, the penalty for illegal distribution or sale of cannabis can result in imprisonment for a term of up to 14 years.
While Health Canada has not ordered a recall on any CannTrust products, they did place a hold on approximately 5,200 kg of dried cannabis in July. CannTrust itself had also put 7,500 kg of dried cannabis equivalent on voluntary hold from distribution, CP24 reports. That is a sale freeze on more than 12,000 kilos of weed.
“We have made the extremely difficult decision to restructure our workforce to reflect the current requirements of our business,” said Robert Marcovitch, interim head of CannTrust Holdings. "These changes also position the Company to better serve our patients and customers with high quality, innovative products in the future."
So far, about 20% of their workforce has been laid off.
