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Consumer, public interest leaders to wireless industry: Forgive early termination fees for unemployed subscribers

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Wireless industry leaders urged to help consumers facing economic crisis by eliminating pricey contract cancellation fees

Release Date: April 21, 2009
Contact: 202-835-3323, This email address is being protected from spambots. You need JavaScript enabled to view it.

Washington, DC, April 21, 2009 — Leaders of the nation’s consumer and public interest organizations today called on the heads of the wireless industry to immediately suspend charging early termination fees (ETF’s) on any subscriber who lose their jobs. Recent reports from the Bureau of Labor Statistics indicate that the jobless rate nationally is at 8.5 percent, and most economists expect that number to rise above 10 percent in the coming months. Millions more are facing involuntary furloughs and underemployment or have ceased looking for work altogether. With this in mind, consumer and public interest leaders, in a letter to the wireless industry, are urging the wireless industry to take the pro-consumer step of allowing subscribers who have become unemployed to cancel their service contracts without incurring penalties that could add to their financial burdens.

The letter was signed by Consumer Action, the Maryland Consumer Rights Coalition, Media Access Project and the National Consumers League.

“As the unemployment rate approaches ten percent, millions of consumers need to find ways to save money due to job loss or having their working hours reduced,” said Sally Greenberg, National Consumers League Executive Director. “For many of these consumers, a big expense is wireless phone service. Unfortunately they are often locked in to expensive services that they can’t afford to keep, but also can’t afford to cancel due to hefty early termination fees. The wireless industry can help such consumers by allowing them to cancel their contracts without incurring the financial burden of ETF’s.”

ETF’s vary by carrier but can cost consumers upwards of $150 per line of service. For consumers on multiple-line “family” plans, being unable to pay for a service plan can threaten them with ETF’s of several hundred dollars or more. The consumer and public interest leaders noted that wireless devices can be essential links for unemployed and underemployed to their support networks and prospective employers. As such, they further urged the wireless industry leaders to allow subscribers who request it to migrate from unaffordable service plans to plans with lower monthly service fees or prepaid plans, again without incurring ETF’s.

“With this small change in policies, wireless phone carriers could offer big help to struggling households reeling from job losses,” said Linda Sherry, director of national priorities, Consumer Action. ”It is also a positive public relations move that will build customer loyalty in the long run. It is surprising the companies didn't think of it first.”

“Cell phones can play a vital role in people's lives, but consumers who are in perilous financial situations should not be penalized for their efforts to trim their expenses and get their household budgets in line,” said Charles Shafer, president of the Maryland Consumer Rights Coalition. “We urge the wireless industry to waive the ETF’s for those who have lost their jobs.”

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About the National Consumers League
Founded in 1899, the National Consumers League is America’s pioneer consumer organization. Its mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. NCL is a private, nonprofit membership organization. For more information, visit www.nclnet.org.

About Consumer Action
Consumer Action (www.consumer-action.org) is a national non-profit organization founded in San Francisco in 1971. During its more than three decades, Consumer Action has served consumers nationwide by advancing consumer rights, referring consumers to complaint-handling agencies through its free hotline, publishing educational materials in Chinese, English, Korean, Spanish, Vietnamese and other languages, advocating for consumers in the media and before lawmakers, and comparing prices on credit cards, bank accounts, telephone plans and other consumer goods and services.

About the Maryland Consumer Rights Coalition
Founded in 2000, MCRC is a non-profit organization focused on fairness and safety in the marketplace. MCRC seeks to advance and protect the interests of Maryland consumers through research, education and advocacy. Our members include individuals and organizations that support the interests of consumers. www.mdconsumers.org

About Media Access Project
Media Access Project (MAP) is a non-profit advocacy organization dedicated to promoting the public's First Amendment right to access a diverse marketplace of ideas in the electronic mass media of today and tomorrow. For over 35 years, MAP has promoted the public interest before the FCC and the Courts, advocating for an open and diverse media that protects the free flow of information, promotes universal and equitable access, and encourages vibrant public discourse on critical issues facing our society. For more information please visit our website at www.mediaaccess.org.