T-Mobile has been fined $20,000 by state insurance regulators for offering what officials called an “illegal inducement to purchase insurance”.
Last year, the Bellevue, WA-based cell phone carrier ran a promotion called “#GetOutOfTheRed” wherein T-Mobile would pay off Verizon customers’ phone loans and early termination fees if they switched to T-Mobile and paid for phone insurance coverage.
In a recent official statement, Washington State Insurance Commissioner Mike Kreidler declared that T-Mobile’s promotion was considered illegal inducement to purchase insurance. Under state law, insurance providers are prohibited from offering prizes or other consideration worth over $100 per consumer per year as an incentive to sign up for insurance.
T-Mobile is a licensed insurance producer in Washington State, and was fined for its violation of the law.
GeekWire reported that 927 Washington consumers had purchased T-Mobile’s “Premium Device Protection Plus” plan through the #GetOutOfTheRed promotion, which ran from May 31, 2017 to August 2, 2017; the plan cost $15 per month.
The news comes after T-Mobile reported suffering a massive data breach late last month, which potentially affected about two million of its customers. Consumer data such as names, billing zip codes, phone numbers, email addresses, account numbers and account types may have been exposed as a result of the breach.
