Lawmakers Consider Consumer Protections on Cell Phone Billing

Among the industry shortcomings reported by consumers were the widespread use of vague and misleading marketing, poor billing practices, a lack of customer service and the aggressive use of extended contract periods and high termination fees designed to tie consumers down and make it difficult to drop or change providers.

Adding fuel to the fire is the consolidation of the cellular phone industry. Just three years ago, consumers could choose among six major cell phone companies. Today, four cell companies control 80% of the US market.

“While there is fierce competition among the carriers that do exist, it is not having a meaningful impact on consumer satisfaction. Consumer Reports, the Better Business Bureau, the FCC and our surveys find that a significant number of consumers are not satisfied with their cell phone service. A major factor contributing to such poor performance are the punitive fees (termination fees) designed to prevent consumers from exercising their clout in the market place and switching providers when they are not satisfied, ” said Deirdre Cummings, Legislative Director for MASSPIRG.

“A 30 day window to decide to stick with a cell phone contract would be a great benefit for consumers and a maximum of a 12 month contract would be a significant improvement. Consumers' communication needs and habits change so a shorter locked-in period is a positive benefit to consumers,” testified Paul Schlaver, Chair of the Massachusetts Consumers' Coalition.