Avoid snags in wireless plans
By Deborah Adamson
Advertiser Staff Writer
You love them or you hate them. But you increasingly realize that you can't live without them.
Deborah Booker • The Honolulu Advertiser
From being a revolutionary product to a major source of annoyance, cell phones elicit mixed feelings among Hawai'i consumers. Although they are widely used — 55 percent of residents have one, compared with 48 percent in the nation as a whole — complaints about cell-phone companies are growing the fastest among Hawai'i utilities.
Joe Fausett, right, a member of the band Zen Outlaw, recently settled a dispute with AT&T over a termination charge in small claims court. Cell-phone companies have been the subject of a rising number of complaints to the state Public Utilities Commission.
"The No. 1 problem is there's too many choices and they don't make it easy for the customer to make a simple choice," said Roger Wilkerson, founder of CellPhoneDoctor.com, a Honolulu-based Web site that offers a free service to help consumers choose a wireless phone plan.
"That means the consumer has to spend more time researching before they make the purchase. If they don't, they're going to end up paying more money," Wilkerson said.
But selecting the right cell-phone plan can be one of the most challenging chores consumers face.
With five major companies offering a dizzying array of plans — in a combination of minutes, monthly rates, sign-up fees, night and weekend rules and roaming charges — choosing a plan can frustrate the most determined comparison shopper. Beyond all the price and service variables, there's the issue of quality of service as well.
The number of complaints about wireless and paging services rose from 14 in 2000 to 119 in 2002 — an increase of 750 percent — according to the state Public Utilities Commission. During the same period, the number of cell-phone subscribers in Hawai'i rose by 32 percent.
Last year, wireless companies received the second highest number of complaints after new car dealers, the Better Business Bureau of Hawaii said. In 1998, cell-phone companies didn't even make the top 10. Complaints focused on billing, quality of customer service and misrepresentation or miscommunication by sales and customer-service staff.
In a random survey of 300 Hawai'i cell-phone users, Wilkerson found that 75 percent said they planned to switch to another company at the end of their contracts. Of the 300, 57 percent said they were dissatisfied with the service and 36 percent complained about the price.
Last month, Hawai'i was among 32 states that reached a deal with Verizon Wireless, Cingular Wireless and Sprint PCS to provide clearer information in their ads regarding service plans, coverage area, rates and restrictions.
The settlement resulted from investigations into charges of misleading advertising and lack of disclosure on rates. The cell phone carriers, who paid $5 million to settle the case, also were told to offer a two-week trial period when contracts can be ended without an extra fee.
Cell phones are "one of these things that people love to hate," said Tim Morstad, policy analyst at Consumers Union, the Yonkers, N.Y.-based publisher of Consumer Reports. "At this point, basic protection for cell-phone customers is still in the works."
In a study released last month, J.D. Power and Associates in Los Angeles gave Sprint the lowest overall customer care ranking. The highest accolades went to T-Mobile, followed by Verizon Wireless.
A Consumer Reports magazine survey released in February gave AT&T Wireless the lowest rating for technical service among major national carriers. Sprint was the second lowest, and Cingular was third. Cingular, which had left Hawai'i, will return after its merger with AT&T Wireless.
AT&T Wireless spokesman Mark Siegel said the complaints are "an infinitesimally small percentage of the total number of cell-phone customers in the U.S. — they are itsy bitsy, teeny weeny percentages. It is a tiny, tiny, tiny portion of our customer base."
One disgruntled customer is Joe Fausett, a Honolulu musician. A few weeks ago, he settled with AT&T Wireless in small claims court over a dispute about a contract termination fee. He said he bought a plan and phone from AT&T last year after seeing an ad pledging no contracts on a certain plan. When he tried to cancel after eight months, AT&T told him to pay a termination fee. Fausett refused, since he said he never signed a contract.
"I'm not going to pay a contract termination fee on a contract I didn't sign," Fausett said.
AT&T Wireless declined to comment on Fausett's case.
As for Sprint, spokeswoman Vicki Soares said that the carrier is continually improving service and that "the changes we have been making will increasingly be reflected in customer attitudes."
Although choosing wireless plans can be confusing, there are smart ways to navigate the terrain. The following are tips from Wilkerson, Consumer Reports and the Better Business Bureau:
• The cheapest isn't always the best plan. Consumers often are lured by the lowest prices. But they should take into account how often they use their phone. Cell-phone companies make money from consumers going above their monthly minutes.
• Get a general idea of your monthly use by averaging the minutes used in your last three cell phone bills.
• Track how you use the phone. If you tend to use your phone to keep in touch with friends and family, you might wish to choose a plan with unlimited calling at night and weekends. If you're a sales representative and plan to use your phone on the road, opt for more anytime minutes.
• Don't let the offer of a free phone entice you into signing a two-year contract. Cell-phone service is getting more competitive and phones are becoming outmoded quickly, so don't lock yourself into a long-term contract. Besides, there's no such thing as a free phone because the carrier has calculated the cost of the phone into the price of the service.
• Check the coverage area to make sure you'll get service where you need it. If you work in outlying areas where reception can be problematic, make sure you'll get adequate coverage.
• Watch the extra charges; they can add up quickly. Directory assistance, text messaging and customized ringtones all come with a cost.
• If the toll-free number for customer service isn't helpful, try the local store that sold you the plan. The retailer received the commission from your business, and it might be more willing to resolve your complaint.
• Sign up on the last week of the month, because sales people might be more willing to make a deal to make their quotas. You might get some extra perks thrown in, such as phone rebates you otherwise might have not gotten.
• If you're buying five or more lines for your family and you are a business owner, consider signing up as a business. Carriers tend to be more helpful to, and less restrictive with, business accounts.
• Read the contract carefully. Ask about termination fees and restrictions, how roaming charges are assessed, if national long-distance calls are included, whether unlimited calling or bonus minutes apply to both incoming and outgoing calls, among other issues.
• Check the Better Business Bureau report on the company at www.hawaii.bbb.org.
• To file a complaint with the state, write to the Hawaii Public Utilities Commission at 465 S. King St., Room 103, Honolulu, HI 96813. For the Hawaii Department of Commerce and Consumer Affairs, call 587-3222.
Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.
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