| Releases
& Statements
For Immediate Release: December 3, 2006
Contact: Frank Sobrino, Press Secretary
O: (212) 669-4193
Gotbaum Warns Holiday Shoppers:
Beware of Hidden Cell Phone Cancellation Fees
Public Advocate Betsy Gotbaum, joined
by City Council members Leroy Comrie and John Liu, and consumer
advocate Chuck Bell, today cautioned holiday shoppers to beware
of the hundreds of dollars in hidden fees independent cell phone
dealers often charge consumers for canceling a cell phone plan.
Researchers from Gotbaum’s office
last year found cell phone dealers charging unwitting consumers
cancellation fees ranging from $50 to $400, in addition to the
$150 to $240 charged by national cell phone service providers,
such as Sprint, Nextel and Verizon. During a recent follow-up
review, Gotbaum’s office found stores still charging the
added fees—and still failing to inform customers.
The Public Advocate Wednesday introduced
a bill to the City Council requiring cell phone dealerships to
clearly post any additional fees they charge customers. Gotbaum
said that until the bill requiring store signage becomes law,
consumers need to ask questions.
“Don’t be afraid to ask
questions when signing up for a cell phone plan, or to shop around
for the best deals,” Gotbaum said. “Be sure to get
all the details on cancellation fees and other charges before
signing on the dotted line.
“With the holiday shopping season
in full swing, it’s important for consumers to know the
full extent of the costs and fees involved in buying a cell phone
plan,” Gotbaum added. “My bill will eliminate the
element of surprise for consumers. It will help protect consumers
from being blindsided by double cancellation fees.”
Council members Comrie and Liu are
co-sponsors of the signage bill introduced by Gotbaum.
Councilman Comrie, Chair of the Consumer
Affairs Committee, said: “I want to applaud Public Advocate
Gotbaum for her leadership on this issue. This report addresses
a serious flaw in the business practices of various cell phone
dealers in our city. Unfortunately, the victims of these hidden
fees are usually working class residents – many who are
living check to check – who patronize these dealerships
and need to get the best bargain for their dollars. I look forward
to holding a hearing on this proposed bill and giving this issue
a full vetting.”
Councilman Liu, member of the Consumer
Affairs Committee, said: “Cell phone providers and wireless
phone companies have aggressively marketed within the community,
and sometimes these marketing practices have misled large numbers
of customers to the point where some people have lost money. Customers
often don’t know the difference between the wireless companies
and the retail outlets that sell the service contracts. Better
disclosure needs to be provided for consumers. The ‘buyer
beware’ attitude of the cell phone companies cannot continue
unabated.”
Chuck Bell, Programs Director of Consumers
Union, the publisher of Consumer Reports, said: “Cell phones
may be wireless, but unfortunately they often come with many strings
attached. Consumers who buy cell phones from independent cell
phone dealers need to be especially careful about avoiding unexpected
termination fees, which can range to hundreds of dollars. We strongly
support the proposed New York City legislation that would require
dealers to give full information to consumers about any such fees
prior to contract signing.”
* * *
|
