Cell phone firms agree to consumer rights

updated 4:29 p.m. ET July 21, 2004

NEW YORK - Three of the nation’s largest cellular phone companies have reached a deal with 32 states that requires them to be more upfront with customers in their advertisements and service plans.

Verizon Wireless, Cingular Wireless and Sprint PCS will be required to provide more detailed coverage maps to consumers, give customers a two-week grace period to end service without penalty and offer full disclosure of service contract rates and conditions. Their marketing also must be more specific about the costs and limits of services.

“Under the agreement, consumers will have a trial period to find out if they have wireless service where they live, work and play,” said Tennessee Attorney General Paul Summers.

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

Together, the three companies have about 85 million customers and provide cell-phone service to more than half the nation’s wireless customers.

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.

The states in the settlement are Alabama, Arkansas, Colorado, Delaware, Georgia, Hawaii, 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.

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