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Consumer Groups Push New Protections for Cell Phone Users in California

Tuesday, August 26, 2003
Janee Briesemiester 512-477-4431, ext 117
Christine Mailloux: 858-558-7930

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SAN FRANCISCO, CA — Consumer groups are offering their support for a bill of rights proposal now being considered by the California Public Utilities Commission (CPUC) that would provide essential protections to telephone customers, including millions of cell phone users throughout the state.
The CPUC will soon vote on a set of new consumer safeguards that would cover the wireless phone industry for the first time and likely set the standard for similar rules throughout the country. In formal comments submitted to the regulatory agency today, The Utility Reform Network, Consumers Union, and the National Consumer Law Center urged the Commission to reject an industry request for further study and adopt the proposal with minor amendments to provide even greater protection for cell phone customers.
“The cell phone companies have locked in profits with iron clad contracts for services that don’t work and complicated and inaccurate billing that no one understands,” said Janee Briesemeister, Senior Policy Analyst for Consumers Union. “Customers who try to complain are subjected to endless automated messages that never lead to anything but irritation. This proposal offers essential consumer safeguards that are long overdue.”
The Telecommunications Consumer Bill of Rights proposal, introduced by Commissioner Carl Wood, is designed to protect consumers from misleading and confusing offers from phone companies. Among other things, the proposal would require phone companies to spell out the key rates and contract terms in clearer language, allow customers to cancel service within 45 days without penalty if they were not satisfied, and bar companies from using a customer’s personal information for anything other than service or billing without first getting consent.
“Cell phone service cries out for stronger regulatory oversight,” said Christine Mailloux, staff attorney for TURN. “Consumers are not able to judge the quality of cellular service in their local areas until they actually purchase a phone. They cannot determine whether they will experience dropped calls or poor reception until they are already committed to a particular carrier and if they decide to cancel their service they face stiff financial penalties.”
Since the CPUC began considering the rules, consumer complaints over misleading advertising, inaccurate billing and inadequate service have skyrocketed. The consumer groups recommended improvements to the CPUC’s proposed rules that address common complaints about contracts and billing for both wireless and land line service, including:
— Clarifying what “key rates, terms and conditions” must be disclosed to consumers signing cell phone contracts to eliminate vague language, qualifiers, and the potential for misinterpretation.
— Requiring carriers to obtain “verifiable, documented, and informed consent” before making changes to the customer’s contract that would result in higher rates or more restrictive terms.
— Requiring carriers to return a customer’s deposit if the customer has had one continuous year of timely payments since the customer has demonstrated acceptable credit.
— Requiring carriers to return a customer’s deposit within 30 days if the customer cancels service prior to one year of service, provided all outstanding balances have been paid.
The groups urged the Commissioners to reject a request by the cell phone industry for further study of the proposal. The wireless companies are pushing the Commission to hold off from voting on the bill of rights proposal until the industry completes its own cost benefit analysis. Such an analysis is not legally required and would likely be heavily biased toward the industry’s costs rather than the consumer benefits.
“For every day these new rules are delayed, thousands of Californians are subjected to confusion, frustration, needless costs, and in many cases, blatantly illegal practices by phone companies,” said Charlie Harak of the National Consumer Law Center. “The Commission has spent four years studying this proposal. It’s time to provide consumers with the protections they deserve.”