Cell phone companies reach deal with states

By Ellen Simon
Associated Press

NEW YORK — Some of the nation's largest wireless companies have just become more accountable to consumers.

Verizon Wireless, Cingular Wireless LLC and Sprint PCS entered into an agreement with the attorneys general of 32 states, including Hawai'i, that will require full disclosure of service contract rates and conditions, more detailed coverage maps to consumers and a two-week grace period for new customers to terminate service without penalty. The carriers also agreed to be more transparent in their advertising.

"These three carriers have agreed to provide new customers with a minimum of 14 days to try out their wireless service to make sure service is available where they need and want it," Hawai'i Department of Commerce and Consumer Affairs Director Mark Recktenwald said in a statement.

The agreements end consumer protection investigations in the participating states that focused on allegations of misleading advertising and a lack of disclosure on rates, terms and conditions, said Ken Salazar, the attorney general for Colorado.

Verizon Wireless is the nation's largest wireless carrier, with 38.9 million customers. Cingular has 25.4 million customers and Sprint PCS Group, a division of Sprint Corp., has 21 million customers. The carriers provide service to more than half the nation's wireless customers.

The carriers also agreed to the following:

• They will allow customers to return phones during the three days after activation and receive a full refund of their activation fee.

• Their marketing must be more specific about the costs and limits of services.

• The carriers will pay the states a total of $5 million for consumer education.

The states in the settlement are Alabama, Arkansas, Colorado, Delaware, Georgia, Hawai'i, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Virginia, Wisconsin and Wyoming.

Mobile carriers were the No. 2 industry for complaints to Better Business Bureaus last year, after auto dealers. The industry had the second-lowest consumer satisfaction ranking, beating only cable providers, in the University of Michigan's June consumer satisfaction index.

The California Public Utilities Commission adopted a Telecommunications Bill of Rights in May that requires companies to inform customers about rate increases, bill customers only for services they request and allow consumers to drop a wireless service, without penalty, within 30 days.

"This and the California consumers' bill of rights show that elected officials and policy-makers have heard consumers and they're taking action to improve conditions in cell phone marketing, instead of waiting for the market to clean up its own act," said Janee Briesemeister, a senior policy analyst at Consumers Union.