Confusing contracts cause pain for cell phone customers

Paula C. of Fort Kent thought she was all set when she made arrangements with a cellular telephone representative at a mall kiosk for phones for herself and her two children. She read the contract closely. It offered 3,000 minutes for each phone and unlimited in-state calls. She and her children dutifully followed the peak minute instructions as they began using their phones. Imagine her surprise when she received her first bill … for over $1,000!

She called the company and was told the “plan” she had selected called for 3,000 minutes SHARED between the three phones. The company’s central office billing representative was almost arrogant when she told Ms. C., “You are responsible for understanding your plan!”

The rep also pointed out that since the consumer lived in Fort Kent, where no tower was available, her signals had to be relayed through a Canadian tower across the border in New Brunswick which meant her calls were not “in state” but “international,” hence an even higher rate. Paula C. was not a happy customer. She continued to complain to the company, with no satisfaction. Soon, she began receiving threatening notices from a collection agency demanding that she pay up. Fed up, she contacted COMBAT.

After reviewing Paula’s contracts, our dispute mediator noticed that the cellular sales rep had written “3,000 peak minutes EACH phone” on each of the three contracts.

COMBAT contacted the company’s billing and accounts manager and explained the problem. The manager agreed to immediately “call back” the collection notice while the company reviewed the matter. A few days later, the manager called COMBAT asking if we or the client had retained copies of the contracts since the company couldn’t find them. Our volunteer mediator hand delivered copies to the company for their review.

A few days later, the company called saying that their sales representative had indeed made a mistake, that the contracts clearly offered “3000 peak minutes EACH phone” and that the company would make good. They dropped all charges, cleared Ms. C.’s account, and notified the collection and credit reporting agencies that all negative references should be eliminated. Ms. C. was understandably elated.

There are several lessons to be learned here.

Cell phone contracts are by nature complicated. You practically have to have an advanced degree in mathematics and accounting to understand even the easiest. Trying to compare between plans, and even worse, competing company plans, is at best frustrating. If the cellular phone companies don’t do it themselves, lawmakers should consider regulations requiring contracts and plans to be standardized, explained clearly, and written in simplified language (much like what Maine did regarding insurance policies).

Cell phone sales representatives, especially those in remote areas away from cell phone sales offices, are often young, inexperienced, and working for commissions. They make mistakes, and considering how complicated the contracts and plans are, no wonder!

Consumers should be fully advised (and sales reps adequately trained) regarding special technical circumstances, like the lack of a tower in Fort Kent resulting in higher charges than promised, or if reception is poor in the areas where the customer needs the phone most. Consumers have a right to information that might limit the value or performance of their service.

Cellular phones are a great blessing, but the technology, combined with the business inexperience of new and rapidly expanding companies, has led to a confusing morass where even the most informed consumers find themselves uncertain, paying higher bills than expected, and with little recourse because the monthly statements would challenge National Defense Agency cryptographers. Dial “F” for “Fix it!”

Consumer Forum is a collaboration of the Bangor Daily News and Northeast COMBAT/The Maine Center for the Public Interest, Maine’s membership-funded nonprofit consumer organization. For help or to request individual or business membership information write: Consumer Forum, Bangor Daily News, PO Box 1329, Bangor 04402-1329.