Consumers Union urges action to address cell phone carrier practices

Consumer Reports News: December 09, 2010 03:39 PM

Consumers Union (the non-profit publisher of Consumer Reports) today sent letters to members of the Senate, the House, and the FCC urging them to take action on behalf of cell-phone owners, specifically in the areas of "bill shock," early termination fees, and exclusive arrangements between handset makers and service providers. CU pointed to reports in the January issue of Consumer Reports magazine that outline a lack of choices for consumers in this marketplace.

Cell phone owners frequently experience "bill shock": unexpectedly high charges for exceeding voice time or data limits. In fact, one in five respondents to Consumer Reports' survey of cell phone users reported that they received a surprisingly large bill. The FCC has already proposed that carriers should warn their customers if they're getting close to incurring overage charges, and CU urged the agency to follow through on that plan.

CU also expressed concern with certain provider practices that limit consumer choice in the marketplace. From the letter:

While competition and innovation exists among devices—especially smart phones—consumers still do not have the option of using these devices with their carrier of choice, which often results in consumers having to put up with continued poor service. Exclusive deals and early termination fees limit the ability of consumers to switch providers if they are dissatisfied with the service of their provider.

Although more than 90 percent of survey respondents use phones under a contract, Consumer Reports did note that no-contract options are increasing.

—Carol Mangis

—Carol Mangis