New Class Action Suits Filed Against Sprint and Verizon

Here we go again. It seems that class action suits are once again targeting wireless carriers. I have made several post that documented the disputes between carriers and customers over wireless contracts and other aspect of consumer-seller relationship. Let's take a look at the case filed against Sprint.

Sprint has been the subject of numerous class action suits and this time the mobile phone carrier has been accused of charging subscribers for unauthorized mobile content. A similar complaint was hurled against Alltel more than a month ago in Illinois federal court.

Subscribers have accused Sprint of billing customers of unauthorized charges that are caused by collaboration between wireless carriers and aggregators that represent premium mobile content providers. The lawsuit that began in state court before being moved to federal court in Kansas states:

“Sprint has for years been systematically, repeatedly and without authorization, billing its customers for purchases of products and services not agreed to by those customers. Sprint and third-party service providers have, on information and belief, profited significantly through this practice.”

In response to this accusation, Sprint emphasized that they are adhering to standard industry practices. A spokesman commented that "we adhere to the Mobile Marketing Association guidelines which emphasize the need for subscriber consent before third-party content is delivered to a handset.”

Sprint's wireless contract devotes a paragraph to third party-content. Here is a part of that paragraph

To protect our network, Services, or for other reasons, we may place restrictions on accessing certain Data Content (such as certain websites, applications, etc.), impose separate charges, limit throughput or the amount of data you can transfer, or otherwise limit or terminate Services. If we provide you storage for Data Content you have purchased, we may delete the Data Content with notice or place restrictions/limits on the use of storage areas. You may not be able to make or receive voice calls while using data Services.

Let's now look at the class action suit launched against Verizon Wireless. The wireless carrier is once again being accused of violating the Fair Credit Reporting Act. The complaint filed inn Alabama federal court claims that TransUnion L.L.C. and Verizon are ruining the credit of a wireless subscriber. Verizon Wireless and Alltel Communications L.L.C.. were also accused of violating FCRA laws in Pennsylvania and Georgia federal courts because of alleged breaches of credit privacy.

According to the plaintiff, Verizon Wireless is continuously trying to collect more than $1,000 from him. He feels that this is unlawful because The carrier falsely reported the disputed debt on his credit reports. The plaintiff claims to have followed Verizon Wireless’ instructions with regards to dealing with possible identity theft by filing l out a police report and sending a copy to the carrier.

Unfortunately, the problem remained even though, a collection agency later received the police report. The plaintiff was forced to contact TransUnion L.L.C. and Equifax because the overdue account remained on his credit reports. Equifax responded by removing the account but TransUnion allegedly did not do the same.

Verizon declined to release any statements in response to this accusations. Here is a part of Verizon's wireless contract statements on credit information,

You’ve authorized us to investigate your credit history at any time and to share credit information about you with credit reporting agencies and our affiliates. If you ask, we’ll tell you the name and address of any credit agency that gives us a credit report about you. It’s illegal for unauthorized people to intercept your calls, but such interceptions can occur. For training or quality assurance, we may also monitor or record our calls with you.

I hope that both parties can sort out their differences and reach a settlement. Of course, it would be naive to think that wireless contract disputes and other problems will cease.The mobile phone industry is among the leader at customer complaints so it's unlikely that customers will stop filing complaints against their service providers.

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.

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.

Some Recent Wireless Plans Complaints

This year, many mobile phone service providers have been hit with class action suits. The reasons for these allegations vary from unjust wireless plans policies to deception and fraud. I decided to look for recent complaints to see more deeply into what wireless customers are complaining about.

Take a look at this complaint posted consumeraffairs.com. This complaint from Bobbie of Graham NC deals with wireless contract problems with AT&T.

I signed a contract with At&T in July '07. I have had nothing but problems since that time. I have even called to cancel the account, and they gave me credit to stay, so I did. But now it's another month, double fees again, and no insurance on 2 of the phones when I clearly added it in the original contract. Now, I want out of this contract;they have not been honest or fair, and they have not honored their part of the contract as they have said in the first contract.

I just can't see having to pay this kind of money every month, or having to stay on the phone for hours with several reps who all say the same thing: that it isn't their fault, it's mine; but they will do ME a favor and fix it. It will cost me $175.00 per phone to cancel. I have (3) phones and not that kind of money.

The early termination fees that are part of almost all wireless contracts plays a large role in this complaint. The customer will be charged a huge fee for violating the terms of a contract. But what happens if the carrier violate the terms of the agreement? Perhaps consumers do have a reason for filing class action suits against carriers.

Here is another complaint on wireless contracts. This time it is directed towards Sprint. Jon of Indianapolis IN posted this complaint,

I am a long-time Sprint customer. I am waiting for contract to expire to change carriers. Have five phones and checked expirations in November 200,7 and three were expired and two were up in April 2008. Checked website in Jan 2008, and all contract dates had changed. No changes were made to my account. I called Sprint and spoke to four different CSR for over an hour with no explanation. I asked to speak with a supervisor and was told they were busy and would call me back within 24 hrs. No call back was received.

Early termination fees of $150X5=$750 will be charged if I leave Sprint. $189 per month until March 2009 if I don't change 189X13=$2457.

This customer was waiting for his wireless contract to expire. Unfortunately, the contract date changed even if he did not make any modifications to his account. Since he has five phones, the fees he will incur for quiting his contract are huge. Has this type of thing also happened to you?

I think I'm beginning to understand why class action suits were filed against mobile services this year. I found a lot of complaints about shady practices that were employed to charged customers with fees or to extend their wireless contracts without their knowledge.

I also noticed that the customer service of some carriers were sub par when I read many complaints. A lot of the customers were unable to get answers they need and some were even treated rudely. Per haps, the legal action taken against these companies will encourage them to improve their services and the policies of their wireless contacts.