Case Against Nextel Stems From Cell Phone Giant’s 2003 Decision to End Itemized Billing, Conceal Charges for Phony Messages
Santa Monica, CA — A California Court of Appeal yesterday overruled a lower court decision that had blocked a consumer rights organization from proceeding with a lawsuit against cell phone giant Nextel for unfair billing practices. Yesterday’s ruling allows the Foundation for Taxpayer and Consumer Rights to proceed with the case, which asks Nextel to change its billing practices and refund potentially millions of dollars to consumers who were wrongly billed for text messages spam.
Beginning in October, 2003, Nextel unilaterally ceased providing itemization of all phone calls on its monthly bill. Customers who wished to receive fully itemized bills in the mail were told they would have to pay $2.50 per phone for the information. The lack of an itemized bill makes it impossible to determine whether charges are accurate. Indeed, every Nextel customer received four phony text messages on September 12, 2003. Nextel improperly charged each of its customers up to sixty cents for the messages. And although Nextel was aware of the error it only gave refunds to customers who figured out that they were charged for the messages and then called the company to demand a credit.
The suit against Nextel, originally filed October 21, 2003 by FTCR on behalf of California consumers, states that Nextel‘s practice of charging for a fully itemized bill and for spam text messages is a violation of the state’s consumer protection laws. The case was proceeding to trial when a coalition of telecommunications, finance, insurance and manufacturing companies successfully sponsored a ballot initiative described as stopping “frivolous lawsuits.” Nextel claimed that the new law applied to FTCR’s lawsuit and a Los Angeles Superior Court agreed, dismissing the case on that ground.
Yesterday’s decision by the Second District Court of Appeal orders the Superior Court to reinstate the suit and to permit FTCR to bring the suit on behalf of one of Nextel‘s customers.
Jordan L. Lurie of the Los Angeles office of Weiss & Lurie, lead counsel in the cases, said: “Customers received Nextel‘s messages. Now it’s time for Nextel to get our message: customers should not be charged for spam text messages or for the information needed to verify the accuracy of their own monthly bills.”
“Consumers are mad as hell about cell phone service,” said consumer advocate Harvey Rosenfield, one of the lawyers representing FTCR. “Instead of looking for ways to nickel and dime consumers with undisclosed and improper fees, then blocking dissatisfied customers from switching to another company by levying early termination penalties, then hiring law firms to escape accountability, cell phone companies should obey the law and treat their customers with respect. Then they can earn the loyalty of customers the good old-fashioned way.”
Group Investigating Other Abuses, Encourages Angry Users to Report Problems
FTCR said it welcomed information from members of the public about poor service and abusive practices of cell phone companies. The group can be contacted at www.ConsumerWatchdog.org or by sending an email to: [email protected]
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FTCR is a nonprofit, nonpartisan citizen research and advocacy organization. Visit us on the web at: www.ConsumerWatchdog.org.