Share this article

print logo

KNOW DETAILS OF CELLULAR CONTRACTS <br> CELLULAR TELEPHONE DEALS MAY NOT BE AS GREAT AS THEY SEEM

You'd think the cell phone companies must be going broke, judging by what they're giving away.

"No long-distance charges . . ." "Free phone . . ." "Free nights and weekends . . ." the ads shout.

But if consumers are getting so much for free, why does the average U.S. subscriber pay $41 a month in local service charges alone?

"If you flip the agreement over, you'll find it's chock full of terms and conditions," said James Morrissey, assistant state attorney general in Buffalo. "The terms and conditions may utterly negate the front side."

Thousands of new cellular users are reaching for wireless handsets all the time. More than one in three adults in Western New York -- 37.5 percent -- already owns a wireless phone, according to a 1999 survey by Scarborough Research in New York. Last year, 56,000 new subscribers in the area went mobile, part of a nationwide surge of new users.

But while the phones may be wireless, they come with financial strings attached -- some of them not so obvious.

This summer the state attorney general's office cracked down on misleading advertising at four wireless companies including the top three operating in Western New York. Cellular One, Sprint PCS and Bell Atlantic Mobile (now Verizon Wireless), all agreed to modify their claims.

Subscribers at Cellular One who signed up for a long-term agreement found they were being billed a "network access charge" for minutes that were originally described as free. And when they decided they didn't like the deal, they faced a disconnect fee that could amount to over $100, Morrissey said.

"It's in very fine print -- I'm not sure how many consumers are going to look at it," he said. Cellular One said that its contracts were legal, and that the changes made under the agreement with the attorney general were minor.

The Cellular Telephone Industry Association in
Washington, D.C., won't comment on industry advertising practices, spokesman Travis Larson said, because of possible antitrust violations.

Although the cellular companies agreed to change some advertising practices after the attorney general's crackdown, their promotional offers remain full of pitfalls for those who fail to read or understand the small print, Morrissey said.

Most cellular plans charge a monthly fee for a bundle of calling minutes or "airtime." But roaming fees, long-distance charges, cancellation fees and per-minute use over the allotted bundle can boost bills well beyond the advertised monthly cost -- to the surprise of some subscribers.

Buffalo City Clerk Charles Michaux dropped service for his office after running into unexpected charges.

"You'd sign up for a certain dollar amount and budget for it," he said. For example, a $49 plan came with 500 local minutes a month. "But then if you did any roaming and long distance, it would ultimately be $120 -- it was more than double."

Michaux used and then dropped three of the area's major cellular services before landing with a Nextel, a business-oriented service that connects him cheaply with a predefined calling group.

Competition among area cellular companies means service offers are constantly being refined, and many subscribers can save money on special packages that bundle a phone, monthly usage and other benefits. But the contracts also remain full of pitfalls for the unwary.

A current promotion from Cellular One touts free night and weekend calling, but the small print explains the offer is only good for the first six months of a one-year contract. Voice mail is free, but connect time charges apply while picking up messages. And a Motorola Startac phone comes free, but early termination charges may be tacked on for backing out of the deal.

Sprint PCS takes jabs at cellular competitors for offering complex calling plans, but the wireless company has its own fine print. Sprint offers 500 minutes at $29.99 a month (with the purchase of a Sprint phone) on its "nationwide" network. The ad even shows a map of the U.S., but Sprint doesn't really cover the entire country. Roaming charges off the company's network cost 39 cents to 69 cents per minute.

Verizon Wireless is pushing a $35-a-month package of 150 minutes with no roaming or long-distance charges. Wireless customers' confusion over roaming and long distance charges prompted the plan, which treats all minutes the same whether they're dialed on the company's network or not, Public Relations Manager John O'Malley said.

But in Verizon's fine print, subscribers face up to $150 in early termination fees if they back out before their contract is up.

The back-out fee is necessary because it wouldn't be economical to offer the promotion without some commitment that customers would stay on for a year, O'Malley said.

"We try to keep plans as simple as possible," he said.

There are no comments - be the first to comment