Suit Attacks Class Action Ban on AT&T's Wireless Contract

Recently, a class action suit against AT&T was filed in the federal court in Washington state. This complaint wants to invalidate the class-action ban AT&T Mobility’s wireless contracts.

Mobile phone service providers usually place class-action bans or waivers in their wireless contracts as a form of protection against legal action. However, these policies have been criticized by consumer rights groups and by subscribers. These policies have also not prevented angry and dissatisfied customers from filing suits and legal complaints against mobile phone carriers.

Harvey Rosenfield, a lawyer with the non-profit Foundation for Taxpayer and Consumer Rights made a statement regarding the significance of this complaint. He explains that, “At stake here is the right of AT&T customers to get a fair hearing and obtain justice. If the court rules that AT&T and Cingular's customers cannot join together to sue these companies, then the companies will never be held accountable.”

According to the plaintiffs, that Cingular Wireless promised regulators and the public that customers would continue to enjoy the same quality service when it merged with AT&T Wireless. Problems began to surface when Cingular allegedly degraded the quality of the AT&T network. It was alleged that this move was designed to force AT&T customers into moving to Cingular's network, paying an $18 upgrade fee, buying new phones and signing up for new two-year plans. To make matters worse, early termination fees of $150 or more were charged to dissatisfied consumers who wanted to move to a different Mobile phone service provider.

In response to this complaint, AT&T released statements regarding the way the handle consumer complaints and grievances. The company stated,

“We continue to believe that a consumer is better off pursuing a claim under our arbitration clause, rather than pursuing a class action. Arbitration is typically a fast, cost-effective, and pro-consumer way to address disputes, and AT&T's arbitration agreement is among the most consumer-friendly in the nation. “In fact a year and a half ago we changed our arbitration clause to make it even more consumer friendly. Our current arbitration clause calls for the company -- if it does not settle a consumer complaint and loses arbitration -- to pay the greater amount of either the arbitration or the state's statutory definition of a small claim (commonly $5,000). Also, if the consumer has used a lawyer in winning an arbitration case, the company would pay two times the lawyers fees. Finally, we pay the entire cost of the arbitration.”

This is certainly interesting. AT&T responded to the complaint when carriers facing class action suits decline any comment. I hope that this dispute will be resolved and end in a compromise that will be fair for both parties.

Options for Consumers who Hate Wireless Contracts

After working on this blog, I have come to the realization that a lot of consumers dislike wireless contracts. Many of them have no love for contracts that bind them to a carrier or plan for a long period. Well, it doesn't take a MENSA member to figure that out.

I have read a lot of complaints against wireless contracts. This year, mobile phone carriers have been assaulted by numerous class action suits because of wireless contract disputes. I have also read the waivers and other statements that protect carriers from consumer complaints. All of these pointed to the fact that wireless contracts are not the most lovable aspect of owing a mobile phone.

After coming upon this brilliant realization, I decided to discuss a couple of the best options available to consumers who do not feel inclined to sign a long term mobile phone contract. Hopefully, these options will be able to guide contract-hating consumers to solutions that will givce them satisfaction.

One of the best ways to get mobile phone services without being caught in the clutches of wireless contracts is by purchasing a mobile phone on its full price. Mobile phone carriers encourage a lot of people to sign wireless contracts by giving a significant discount on the handsets. Customers are obliged to sign the contract so that they can take advantage of the discounts and perks. Never mind that contracts also come with numerous disadvantages.

A few weeks ago, Massachusetts Representative Edward J. Markey authored the Wireless Consumer Protection Bill. This bill aims to nullify the need for consumers to sign a mobile phone contract when they pay the full price for handsets. This bill is still being debated upon in Congress but some carriers allow customers to be free of contracts if they pay for the whole price but they do not advertise this option.

If you are a rich hombre, then you can probably march to a mobile phone retail store and purchase the hottest phone without signing a wireless contract. However, we can't all afford to purchase cool mobile phones at full price. Some customers have to turn to the Internet to get away from wireless contracts and get mobile phones at the same time.

You can get mobile phones at online auction sites like eBay at affordable prices. These phones
are free of contracts so customers can simply go to a cell phone service provider and activate the phone. However, purchasing gadgets and other items from online auctions can be risky do customers should consider this option carefully.

If you hate wireless contracts and can't afford to purchase a phone at full price or discount phones on the web, then you have another option. You can turn to prepaid plans if you don't want to be restricted by a wireless contract.

Consumers who get prepaid plan will be able to pay for minutes upfront. They can then simply get a new one once those minutes have been used up. You can say good riddance to wireless contracts if you choose this option. There will be no more complaints over unfair bills, contract extensions, fees and credit checks.

Unfortunately, getting a prepaid plan to escape a wireless contracts is not a perfect solution. You will be missing out on perks and promotions if you go prepaid. Contracts can be restrictive but they do offer discounts and promotions that make up for it. Customers have to weigh the options care fully before they choose this option. Some lifestyles may be compatible with prepaid plans but some people may be better off with wireless contracts.

More Wireless Contract Complaints

I looked around for some consumer complaints that are directed towards wireless contracts. Some of these complaints are a few years old but it will also be interesting to see if the wireless contracts adapted to cater to those complaints. We may also be able to learn a few things by looking at these wireless contract complaints.

I visited consumeraffairs.com and found numerous wireless contract complaints. here is an example filed by Lonnie of Sullivan IL.

"U.S. Cellular sold me a two year plan in December 2002. They carefully pointed out there was a $150 early cancellation fee if we cancelled before the two years was up. In November 2003 U.S. Cellular lost their ability to use Verizon's tower in our area. Suddenly our phone service tanked. We could not call out many times. During calls we would frequently get dropped. We were often unable to get calls. Our messages never showed up. We gave U.S. Cellular until this month to fix the problem, which is their problem as far as I am concerned. However, the service never improved and I finally cancelled this month. Naturally the customer service representative told me I had to pay the $150 cancellation fee, even though I was cancelling because of their erratic service. As far as I am concerned, U.S. Cellular's much vaunted customer service stinks."

This wireless customer claims that he had no choice but to cancel his wireless contract because of the poor service he was getting. When US Cellular was unable to get service from a Verizon tower in Lonnie's area, the customer began to experience problems like dropped calls and lost messages.

The customer asked the carrier to remedy the problem but there was no response from the network so Lonnie had no choice but to cancel his wireless contract. Unfortunately, Lonnie was asked to pay the early termination fee because he opted to terminate his contract.

This complaint encourage me to look at the coverage policy of US cellular. May the wireless contract has offered a solution or a statement regarding customer getting poor coverage. this is what I found:

You understand that Service may be interrupted or unavailable due to atmospheric or topographical conditions, governmental regulations or orders, or system capacity limitations. Representations of coverage by U.S. Cellular or its agents are not guarantees.

The wireless of US Cellular states that many factors can lead to customers having poor coverage or service. Thus the carrier cannot guarantee coverage to customers. Maybe this statement was crafted to discourage customers from continuously complaining about getting bad coverage. Perhaps this statement was meant to inform customers that coverage may not always be available. The important thing is that customers have to remember that US Cellular do not guarantee coverage.

Here is another wireless contract complaint from Keith of Derry NH. This compaint involves warranties.

"I bought phones for me and my two kids. My daughter's phone stopped working and Go Wireless refused to honor the warranty. They have a Verizon Wireless sign bigger than their own sign and represent themselves as Verizon. But when it comes to customer service they did NOTHING. The manager Nathan was rude and unprofessional. When I complained to Verizon Wireless directly, they made it clear that Go Wireless does not speak for Verizon."

This customer claims that Go Wireless representing themselves as Verizon offered a warranty for theuir mpobile phones. However, when the devices failed to perform, the vendor did not honor the warranty. Verizon denied any relationship with Go Wireless and any responsibility for the defective devices.

I scanned the Terms and Conditions of Verizon Wireless for any policy or statement concerning warranties. I found this statement in capital letters:

WE MAKE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE CONCERNING YOUR SERVICE OR YOUR WIRELESS PHONE. WE CAN’T PROMISE UNINTERRUPTED OR ERROR–FREE SERVICE AND DON’T AUTHORIZE ANYONE TO MAKE ANY WARRANTIES ON OUR BEHALF. THIS DOESN’T DEPRIVE YOU OF ANY WARRANTY RIGHTS YOU MAY HAVE AGAINST ANYONE ELSE.

So I guess this disclaimer makes it clear that Verizon Wireless does not authorize any one to claim any warranties on the behalf of the company. Customers must avoid shady dealers who claims that a warranty is backed by the company. This statement from the wireless contract clearly indicates that warranties made by dealers for the company are not genuine.

Well, I guess that's it for today. Reading complaints from consumers can give some feedbacks about a company. You might even find it helpful to post your own complaints in these sites. Perhaps your sentiments may move carriers or law makers into action.

More Class Action Suits Filed against Sprint and T-Mobile

Here we go again. This certainly seems to be the year of class action suits against mobile phone carriers. New just a few days ago. Both of these companies have already been hit with class actions suits this year, and the new complaints are sure to bring new problems.

Let us begin with the complaint against Sprint. This is the third class action suit filed against the wireless network this year. The first complaint filed against the company was based on complaints that Sprint illegally extended the wireless contracts of customers after they made minor changes to their service. In the second complaint, Sprint was accused of misleading consumers by improperly charging roaming fees in connection with two “fair and flexible” plans.

The third complaint against the carrier this year is also on roaming charges. The complaint that subscribers were charged for roaming charges after being told they would not incur such fees under a major calling plan were filed in Florida and in North Carolina. The suit states that,

Sprint knew or reasonably should have known that these representations were materially false, deceptive or misleading because it not only routinely charged PCS Free and Clear Plan customers roaming rates for calls made and received ‘on the network,’ Sprint even charged these customers roaming rates for calls in their home cities where the plan was sold and where Sprint purportedly provided comprehensive network coverage. In fact, Sprint not only charged its customers roaming charges for calls made on the Nationwide Sprint PCS Network, it even charged them roaming charges for calls received on the Nationwide Sprint PCS Network.”

Roaming charges are certainly controversial. People have questioned how carriers were calculating these charges and it often results in class action suits or wireless contract disputes. This recent complaint against Sprint accused the company of charging customers even if they were making calls in the location where they purchased their plans. Customers claim that they were even charged for roaming even if they only received the calls.

Let us take a look at the company's s wireless contract. Maybe we can get some info on how the carrier charges customers for roaming. Here is the statement from the wireless contract of Sprint.

"Roaming" typically refers to coverage on another carrier's network that we make available to you based on our agreements with other carriers. These agreements may change from time to time and roaming coverage is subject to change. Your ability to receive roaming coverage depends on the radio transmissions your Device can pick up. You can pick up roaming coverage both within and outside our network coverage areas. Your Device will generally indicate when you're roaming. Depending on your Services, separate charges or limits on the amount of minutes used while roaming may apply. Certain Services may not be available or work the same when roaming (including data Services, voicemail, call waiting, etc.).

Interestingly, the terms and conditions of Sprint affirms that customers may pick up roaming coverage within and outside of their coverage areas. however, the customers claim that they were told that they will not incur these fees because they were under a major wireless plans. I guess we'll have to leave it to the authorities to figure this mess out.

Let us move on the complaint against T-Mobile. The wireless company also faces a class action suit filed in California federal court. The complaint accuses the company of not providing enough information on an “upgrade fee” that are applied on current subscribers who want to get new mobile devices.

T-Mobile’s use of wireless contract clauses that impose mandatory arbitration and waive the right to participate in class action suits was also attacked. here is a sample of this type of clause taken form T-Mobile's terms and conditions:

CLASS ACTION WAIVER. WHETHER IN COURT, SMALL CLAIMS COURT, OR ARBITRATION YOU AND WE MAY ONLY BRING CLAIMS AGAINST EACH OTHER IN AN INDIVIDUAL CAPACITY AND NOT AS A CLASS REPRESENTATIVE OR A CLASS MEMBER IN A CLASS OR REPRESENTATIVE ACTION. NOTWITHSTANDING SEC. 22, IF A COURT OR ARBITRATOR DETERMINES IN A CLAIM BETWEEN YOU AND US THAT YOUR WAIVER OF ANY ABILITY TO PARTICIPATE IN CLASS OR REPRESENTATIVE ACTIONS IS UNENFORCEABLE UNDER APPLICABLE LAW, THE ARBITRATION AGREEMENT WILL NOT APPLY, AND YOU AND WE AGREE THAT SUCH CLAIMS WILL BE RESOLVED BY A COURT OF APPROPRIATE JURISDICTION, OTHER THAN A SMALL CLAIMS COURT.

All the wireless contracts I've read has their own version of these clauses but a federal circuit court in San Francisco ruled that T-Mobile’s terms and conditions are unenforceable. I guess we'll have to see the lawyers of both parties duke it out. Perhaps the new consumer bills being drafted in congress will provide a way to solve these disputes.

Wireless Contracts and Security

After surfing the web for some news, I found this article on Security and the mobile phone industry. The RCR Wireless news article discussed the importance of security in the future of the cell phone market.

The article quoted a security adviser who feels that if security is not given enough attention then growth in the wireless industry will be stymied. The article also pointed out that software and applications used in the mobile phone industry are the most vulnerable to exploitation. Since we now use mobile devices for everything from booking flights to paying bills, we cannot overlook the importance of application security.

The article lead me to think about security as stated in wireless contracts. The existence of security policies or statements related to security may indicate if a carrier considers it as a priority. The presence of security measures or policies in wireless contracts or terms and conditions may also provide information and insight.

I scanned the wireless contracts published by major mobile phone networks on the Internet and found a couple of interesting statements. Here is a statement on security form AT&T's Terms and conditions:

AT&T DOES NOT GUARANTEE SECURITY. Data encryption is available with some, but not all, Services sold by AT&T. If you use your device to access company email or information, it is your responsibility to ensure your use complies with your company's internal IT and security procedures.

If you subscribe to AT&T then you should always keep in mind that your carrier does not guarantee security. You have to be careful with any sensitive information you send using mobile devices from AT&t because they are unsecured as stated in the wireless contracts.

The statement does indicate that some AT&T devices are equipped with data encryption so the company has made effort to provide security. However, customers still have to take responsibility for keeping important information safe.

Here is another wireless contract statement that involves security. T-Mobile's terms and conditions states that:

Wireless systems use radios to transmit communications over a complex network. We do not guarantee that your communications using the Service or Products will be private or secure, and we are not liable to you for any lack of privacy or security you may experience. You are responsible for taking precautions and providing security measures best suited for your situation and intended use of the Service.

This statement form the wireless contract of T-Mobile stresses the risk of transmitting important information on mobile devices. As with AT&T, T-Mobile will not be responsible for any security breach that users may experience when using their device. The customers have to take precautions to ensure that their personal information is kept safe.

These statements form the wireless contracts of two major wireless networks indicate that security in the mobile phone industry is not yet guaranteed. There are some efforts done towards data encryption and other security measures but customers still have the responsibility of protecting important information.

AT&T Reimburses Customers for Third-Party Scams

I just came upon an interesting piece of news. it seems that thousands of Florida customers were billed for third-party services such as ringtones and text messaging that were advertised as free. As a result AT&T Mobility has agreed to reimburse these customers in fees that could amount to more than $10 million. That's a lot of dough.

According to this CNN Money article , the blame rests in third-party companies. Apparently, these companies advertise ringtones and other services on the web and promised customers that the service will not cost them anything. The problem begins when teenagers sign up for these "free" services without consent from their parents. When the monthly bills arrived and parents find charges on their wireless bill, they would naturally complain to customer service.

The charges that appear in the monthly bills are often unclear so AT&T Mobility has agreed in the settlement to police such agreements with third-party providers. They will clarify what the charges are for as part of the agreement. The wireless carrier want to make amends for the damage done by this fraudulent and deceptive advertisements.

This news intrigued me so I decided to look at the wireless contract of AT&T. I want to see if the AT&T wireless contract contains any provision or policy on third-party services. Well, I scanned the terms and Conditions and observed that AT&T has mentioned third parties numerous times. Here is the statement that may be most relevant to this issue,

Certain information or content is provided by independently owned and operated content providers or service providers who are subject to change at any time without notice. AT&T IS NOT A PUBLISHER OF THIRD-PARTY INFORMATION OR CONTENT AND IS NOT RESPONSIBLE FOR ANY OPINIONS, ADVICE, STATEMENTS, OR OTHER INFORMATION, SERVICES OR GOODS PROVIDED BY THIRD PARTIES. Third-party content or service providers may impose additional charges. Policies regarding intellectual property, privacy and other policies may differ among AT&T's content or service providers and you are bound by such policies when you visit their respective sites or use their services. It is your responsibility to read the rules or service agreements of each content provider or service provider. Any information you involuntarily or voluntarily provide third parties is governed by their policies. The accuracy, appropriateness, content, completeness, timeliness, usefulness, security, safety, merchantability, fitness for a particular purpose, transmission or correct sequencing of any information or downloaded data is not guaranteed or warranted by AT&T or any content providers or other third party. Delays or omissions may occur. Neither AT&T nor its content providers, service providers or other third parties shall be liable to you for any loss or injury arising out of or caused, in whole or in part, by any information acquired through the Service. You acknowledge that every business or personal decision, to some degree or another, represents an assumption of risk, and that neither AT&T nor its content and service providers or suppliers, in providing access to information, underwrites, can underwrite, or assumes your risk in any manner whatsoever.

The wireless contract of AT&T states that they are not responsible for any information, services or goods provided by third-parties. Then, Why did the company agree to reimburse the customers who were charged for the third-party services? My guess is this policies were updated after this issue came out, AT&T has change the wireless contracts to protect itself from similar incidence. However, I'm not sure about this. Perhaps these statements were already in the contract before this issue became public.

I think they did the right thing. By agreeing to reimburse the customers victimized by these scams, AT&T can maintain a reputation as a just company. And by stating in their contract that they are not responsible for any services provided by third-parties, the company is protecting itself from problems that may stem from these companies.

The important lesson to learn here is that one not trust third-party services easily. The offers made on the Internet should not be trusted unless they have been verified. The wireless contracts of carriers already have statements that protect the carriers from these scams, so wireless customers should avoid getting mired in these fraudulent practices.