Consumers Challenge Cell Phone Early Termination Fees; Need for Cell Phone Consumer Protections in NY Gets Fuel from CA Court Case
30 June 2006
Advocates fighting for cell phone consumer protections in New York State received encouragement from across the country. A recent Superior Court ruling in California found that consumers can move ahead with a class action lawsuit against some of the nation's largest wireless carriers (Verizon Wireless, Sprint and Nextel), alleging that the early termination fees the companies charge consumers are unlawful. The findings delivered a strong message -- cell phone consumers need better protections.
New York legislation, sponsored by Assemblyman Daniel O'Donnell, would provide the strongest set of cell phone consumer protections in the nation. The bill, which recently passed out of the New York State Assembly, is a top priority for AARP. The State Senate failed to pass needed consumer protections for the over 11 million cell phone users in New York.
"The California case highlights exactly what we are urging our legislators to do in New York -- pass a new law to protect consumers from getting locked into long-term contracts," said Lois Aronstein, AARP New York State director. "The State Assembly took a stand on this issue against heavy pressure from the cell phone industry and AARP is now urging the Senate to do the same when they return to Albany later this year."
The consumers in the California case say the cancellation, or early termination, fees -- charged if a customer leaves a company before the term of his or her contract is up -- are penalties that unfairly tie customers to the companies by making it difficult for consumers to switch to another carrier. The New York legislation (A.8539-O'Donnell) would allow people to cancel their contracts without penalty after they receive their first bill; require cell phone companies to disclose all hidden fees; and, provide consumers with better coverage maps, including where E-911 works. The measure is heavily opposed by the cell phone industry.
"AARP strongly supports the issue as older New Yorkers tend to buy their cell phones to use as safety tools in case of an emergency," added Aronstein. "Many people on fixed incomes are finding themselves locked into unaffordable contracts because the amount billed is frequently higher than the advertised price. Something's got to be done to protect consumers."
In 2004 and 2005, the Better Business Bureau reported that more complaints about cell phones were received than any other business. According to the New York State Consumer Protection Board, the cell phone industry is the second most criticized in the state. AARP believes that passing the legislation will make the industry more competitive and responsive to consumers who would be retained because of service and quality rather than lengthy contracts.
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AARP has over 2.6 million members in New York State. AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP produces AARP The Magazine, published bimonthly; AARP Bulletin, their monthly newspaper; AARP Segunda Juventud, their bimonthly magazine in Spanish and English; NRTA Live & Learn, their quarterly newsletter for 50+ educators; and their Web site, http://www.AARP.org. AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. AARP has staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
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