Cell phone insurance companies settle

After looking at tens of thousands of phone company documents, attorney Moskowitz found that many refurbished phones do get “a pretty strict quality check.” He also says he was  surprised to learn that these refurbished phones usually have a higher value than the deductible, but not always.

Since 2004, as many as 15,000 people across the country were sent refurbished phones worth less than the their deductible, according to court papers. They paid $50 and received phones worth $44 to $47.

Preliminary settlement reached
Last Friday, the federal judge handling this case approved a preliminary settlement between the plaintiffs, Asurion and Lock\line that will affect as many as 13 million cell phone customers. Signal Holdings did not settle and is still in the lawsuit.

Under the terms of this agreement, all Asurion brochures, advertisements and marketing materials will state that claims may be fulfilled with “new and/or refurbished equipment” and that each replacement is subject to a non-refundable deductible per loss. Asurion has also agreed that if the value of the replacement phone is less than the deductible, customers will be told so they can decide whether to pay the deductible and proceed with the claim.

Who gets what?
The nationwide class consists of all former and current Asurion or Lock\line customers who made premium payments, filed a claim, and received a refurbished phone between January 20, 2004 and January 26, 2007. They will get a phone card worth at least $5. This will cost Asurion at least $1.5 million and potentially as much as $60 million.

The 15,000 or so customers who submitted a claim during this time period and got a refurbished phone — generally worth $3 to $6 less than the deductible — will get a voucher for a new phone worth $75 to $100. No other purchase is required to use this voucher — as is often the case with class action settlements — and the voucher is fully transferable, so it can be given or sold to someone else.

Letters will soon go out to all 13 million members of the class, giving them details of the settlement and explaining their rights to remain in the class or opt out. The judge in this case has scheduled a final hearing in May to approve the settlement.

The lawsuit against Signal Corp. No trial date has been set. I spoke to the company’s attorney and asked him why Signal decided not to settle. He told me the company would have to answer that. No one at the company ever responded to my calls.

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