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Junk phones and contracts of adhesion–Update

May 29, 2008

Is anyone else having trouble with their cell phone carriers? What a riot; of course they are. A quick search revealed page after page of bad-faith dealing. Consumers are fighting back. Government is joining the fight. Perhaps a spree of mass tort litigation will whip through the land, raising costs and malfeasance even higher.

After an exhausting trip to the T-Mobile store that I thought would effect a more efficient exchange of my third defective phone in nine months for a new one, it was, “Coises, foiled again.” 

It seems the carriers’ answer to the problem of selling you a phone that doesn’t work is to force you to extend your contract. Or, if you no longer love and trust your carrier, you can pay $200 to walk away. I say if they’re going to behave irresponsibly, they need a nanny, even though I much prefer corporations and consumers to negotiate their own affairs without government intervention.

But cell phone carriers have said “no” to negotiation, leaving consumers to fuss to government or lawyers. Rueful hint: Government is cheaper, but of course that’s because you pay for it anyway.

I sent this letter to my state senator with copies to my state representatives.  I don’t propose it as a model letter, but it might be a useful outline if you aren’t already a professional fussbody. Senator Debbie Regala serves on the Washington State Legislature’s Water, Energy, and Telecommunications Committee. If your legislative representative does not serve on a committee relevant to your issue, that’s ok; the best route is to write your own rep and ask him to forward your concern to the appropriate committee. In most cases he will do that anyway.

Dear Senator Regala,

My husband and I are nine months into our second two-year cell phone contract with T-Mobile. We have the most basic family service plan offered and opted for the most basic phones that came free of additional cost with our original contract. We received new free phones with our renewal in 2007.

My new phone stopped working reliably and T-Mobile replaced it without hassle with the same model. The replacement phone stopped working almost immediately. I am technically adept by most standards–really, these phones were junk. I was told I would have to purchase an upgrade and purchase a new phone. That was fine–a free phone is not an unconditional contract provision in perpetuity. However, I was compelled to agree to a one-year extension of our contract period in order to replace my defective phone. If that phone proved unacceptable, I was told I could rescind the extended contract provision.

Incredibly, the third phone ceased to function reliably, and now my fourth phone in nine months is due to arrive. Again, I had to affirm the contract extension. I have no confidence in T-Mobile’s ability to provide a reliable cell phone, but there is a $200 penalty for rescinding the contract completely.

Consumers are being subjected to contracts of adhesion in order to maintain cell phone service. Either legislative action or resource-draining litigation is going to be necessary to keep this industry competitive and competent.

I note that you are on the Water, Energy, and Telecommunications Committee, so I hope this concern is of interest and within your bailiwick.

Thank you for your service and dedication to the people of Washington.

UPDATE:  Senator Regala responded this morning:

Dear Lauren,

Thank you for bringing this issue to my attention.  I have asked our
Senate Committee staff to look into the issue and also make an inquiry
with the Attorney General’s office regarding this practice.  I will be
back in touch after they have done the research.

Sen. Debbie Regala

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