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Oct 21, 2003
CONTACT: Harvey Rosenfield (310) 392-0522 ext. 303 or Jordan Lurie 310-209-2800
Consumer Group Announces Lawsuits Against Cell Phone Companies for Billing, Service Rip-Offs
Nextel Stops Sending Itemized Bills, Conceals Charges for Phony MessagesSanta Monica, CA --Consumer advocates today announced that they have filed lawsuits against two of the nation's largest cell phone companies, Nextel and Cingular, for violation of state consumer protection laws. The suits, filed by the non-profit Foundation for Taxpayer and Consumer Rights on behalf of California consumers, demand that the companies cease the illegal practices that have infuriated consumers and refund overcharges.
• The Nextel suit, filed this morning in Los Angeles Superior Court, charges the company with issuing bills, starting October 1, that contain no itemization of calls. Failure to provide an itemized bill makes it impossible to determine whether the charges are accurate. Indeed, every Nextel customer received four phony text messages at approximately 10:58 pm on September 12. Nextel charged each of its customers up to sixty cents for the messages, but these charges were not disclosed to consumers because of the new billing policy. And although Nextel is aware of the error, it will only give refunds to customers who manage to figure out that they were charged for the calls and then call the company to demand a credit.
• The Cingular suits (a class action and a California state suit), filed October 1 in Los Angeles Superior Court, charge the company with falsely advertising the quality of coverage the company provides in order to boost subscribers and revenues; maintaining inadequate facilities to meet the requirements of customers obtained through the advertising, leading to dropped calls, static, or inability to place calls; inadequate customer service staff; inadequate disclosure of charges; improper billing; and levying "early termination fees" to prevent dissatisfied customers from going to a different company. Citing similar abuses, the California Public Utilities Commission recently ordered Cingular to pay a $12 million fine for its conduct -- but noted that only through litigation can consumers be fully reimbursed.
Jordan L. Lurie of the Los Angeles office of Weiss & Yourman, lead counsel in the cases, said: "Customers received Nextel's messages. Now its time for Nextel to get our message: Stop charging illegal fees. Stop hiding the fees. Start providing the level of services paid for by your customers."
"Consumers are mad as hell about cell phone service," said consumer advocate Harvey Rosenfield, one of the lawyers representing FTCR. "First of all, it doesn't work -- you can't get access, you can't make a call or you get disconnected in the middle of a call. Then there's the bogus fees and overcharges that nickel and dime us out of our money and the deliberately lousy customer service that prevents you from getting the bill fixed. If you try to walk away, they punish you with an 'early termination fee.'"
"The companies have spent their money on advertising to get new customers, and not enough on the facilities needed to provide service to their customers. Thanks to deregulation, the only way cell phone abuses can be rectified is through lawsuits on behalf of the public. Nextel's duplicitous new billing practice is the cover-up of a major rip-off strategy that is starting to spread to other companies. Cingular is a poster-child for poor quality service and sharp business practices designed to enrich the company by ignoring its legal obligations to its customers."
Group Investigating Other Abuses, Encourages Angry Users to Report Problems
FTCR said it welcomed members of the public to provide information about poor service and abusive practices of Nextel, Cingular and other companies. "We have sued two of the biggest offenders for particularly improper conduct, and it is likely we will pursue other companies engaged in similar rip-offs."
The group can be contacted at www.consumerwatchdog.org or by sending an email to:
FTCR is a non-profit, non-partisan citizen research and advocacy organization.
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