BOSTON—
Consumer groups, consumers and lawmakers urged members of the Joint
Committee on Telecommunications, Utilities and Energy to support
consumer protections for cell phone customers at a public hearing today
at the State House. The bill -- The Cell Phone Users’ Bill of Rights
(SB 1982, HB 3389) -- was filed jointly by Representative Steve Walsh (
Lynn) and Senator Karen Spilka ( Ashland).
Consumer
complaints about cell phone companies’ unfair billing practices and
poor quality are leading to calls for change from frustrated customers.
Complaints to the Federal Communications Commission (FCC), which
oversees the wireless industry, continues to receive over 25,000
consumer complaints a year for the last 3 years. In a 2006 survey,
Consumer Reports found that cell service still leaves a lot to be
desired. As a group, cellular carriers scored only 66 on a scale of
0-100 for overall satisfaction (100 being the best), worse than most
other services they survey – in line with cable TV and computer tech
support.
“They
[cell companies] act like they can charge customers whatever they want,
whenever they want, even improperly, and not be held accountable,”
complained Michelle Chisholm, of Norfolk, a former Nextel customer who
switched to Sprint before the two companies merged, who complained
about her service to MASSPIRG, the District Attorney, and the Attorney
General.
“What
I went through is clearly bad business practice and should be illegal,”
said Chisholm, “First, without notice, my 2 year cell phone contract
was extended without permission; I was continuously charged erroneous
fees which after agreeing it was an error could not stop it, and
resulted in my account being turned over to a collection agency – for
money I did not owe.”
“I've
never met anyone who hasn't had a problem with their cell phone,”
stated Senator Karen Spilka, Senate sponsor of the Cell Phone Users’
Bill of Rights. “From bad customer service to billing issues,
consumers continue to complain about their wireless service.”
“This
bill would create a very basic consumer bill of rights,” Spilka
continued. “Nothing in it in any way hampers competition. In fact,
the practices the cell phone companies use currently are actually
anti-competitive. By allowing consumers to have shorter contracts and
extended trial periods, the Cell Phone Users’ Bill of Rights gives
them more power to force companies to respond to their complaints.
Otherwise, consumers can just switch.”
“The
home phone has been replaced by the cell phone for many Massachusetts
households as their only means of communication. Can you imagine how
annoyed you would be if your home phone continuously disconnected while
talking to family and friends, some on long distance?” asked
Representative Steven Walsh, House sponsor of the bill, “We have the
responsibility of regulating the cell phone industry, like we do for
many other consumer products and services, to guarantee that
Massachusetts residents are being treated fairly.”
MASSPIRG
presented the committee with 60 stories of Massachusetts consumers
who’ve experienced problems with their cell phone companies.
Nearly half (47%) of all cell phone customers would switch or consider
switching cell phone service carriers to get a lower rate and better
service if they didn’t have to pay an average penalty of $170 to cancel
their service contract, according to a MASSPIRG report, “Locked in a
Cell: How Cell Phone Early Termination Fees Hurt Consumers.”
Overall dissatisfaction was earlier confirmed in a March 2005, MASSPIRG report: “Can You Hear Us Now”.
The survey of 874 Massachusetts cell phone customers found that 42% of
consumers reported having a billing problem with their provider and 68%
reported dropped calls and other quality problems.
Among
the industry shortcomings reported by consumers were the widespread use
of vague and misleading marketing, poor billing practices, a lack of
customer service and the aggressive use of extended contract periods
and high termination fees designed to tie consumers down and make it
difficult to drop or change providers.
Adding
fuel to the fire is the consolidation of the cellular phone industry.
Just three years ago, consumers could choose among six major cell phone
companies. Today, four cell companies control 80% of the US market.
“While
there is fierce competition among the carriers that do exist, it is not
having a meaningful impact on consumer satisfaction. Consumer Reports,
the Better Business Bureau, the FCC and our surveys find that a
significant number of consumers are not satisfied with their cell phone
service. A major factor contributing to such poor performance are the
punitive fees (termination fees) designed to prevent consumers from
exercising their clout in the market place and switching providers when
they are not satisfied, ” said Deirdre Cummings, Legislative Director
for MASSPIRG.
“A
30 day window to decide to stick with a cell phone contract would be a
great benefit for consumers and a maximum of a 12 month contract would
be a significant improvement. Consumers' communication needs and habits
change so a shorter locked-in period is a positive benefit to
consumers,” testified Paul Schlaver, Chair of the Massachusetts
Consumers' Coalition.
The Act to Establish a Cell Phone Users’ Bill Of Rights was heard today at a public hearing before the Telecom, Energy and Utilities Committee at the State House.
The bill includes the following consumer protections:
Better disclosure:
- All
wireless contracts and marketing materials must clearly spell out the
terms of the contract in an easy-to-read, standardized format so
consumers can compare costs. The disclosures must be made available and
accessible to consumers comparing prices and services.
- All
providers must provide consumers with coverage maps that are as
accurate as current technology would allow. These maps must be
available on the provider's Internet site as well.
Billing:
- Cell
phone bills must be clearly organized. All mandated government taxes,
surcharges and fees required to be collected from consumers and to be
remitted to federal, state, or local governments would be listed in a
separate section of the bill and clearly itemized. This section of the
bill may not include any charges for which the carrier is not required
to remit to the government.
- Roaming calls must be itemized on the bill within 60 days of the call, and identify the date and location of the call.
- Charges
from theft that arise after reported to the carrier may not be charged
to the consumer as long as the consumer promptly reported the theft to
the service provider.
- Consumers will be able to file billing
disputes with the state utility commission and providers should not
treat the disputed portion of the bill as late or terminate the
contract or service for non-payment if the billing dispute complaint is
pending with the state.
Service Quality:
- The
DTE (Department of Telecommunications and Energy) would monitor service
quality. Data should be collected and made publicly available so
consumers can compare signal strength, dropped call counts and dead
zones across carriers.
Service Contracts:
- Consumers
would have a trial period during which a customer can cancel any new
service contract without having to pay the hefty contract termination
fee ($175-300). This gives consumer time to see whether the phone works
where and how it was promised. Consumers would have 30 days to cancel
after having received their first bill.
- Carriers
can not extend a customer's contract without obtaining a customer's
written permission. Currently, many consumers do not realize that they
are extending their contracts by upgrading their phones or by
increasing or decreasing the minutes in their plans.
- No contract for wireless telephone service can be longer than twelve months.
- Any
material changes that the carrier makes to the contract must be
provided to customers in advance, and customers would have a 30 day
opportunity to terminate the contract without penalty and to receive a
pro-rated refund of the charges they paid for purchasing a phone for
the carrier's network.
Consumer Privacy:
- Carriers
must obtain customers express permission prior to making cell phone
numbers public. They may not charge a fee for keeping the number
private.
