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Problem: Poor coverage.
Substandard service quality was the biggest reason our survey respondents switched carriers in the previous three years, our survey found.

Solution:
Listen to our readers’ experiences. Alltel and Verizon got high marks across the board for connectivity.T-Mobile had relatively high satisfaction scores, but customers experienced problems with lack of service in some cities. Subscribers also highlighted problems with AT&T for gaps in service and static, and with Sprint for dropped calls. Check the signal strength down to street level in areas where you‘ll use the phone most frequently. Interactive online coverage maps, offered by most carriers except Alltel, provide some guidance as to what you can expect.

Problem: Unsatisfactory customer service.
The trouble spots include serious or persistent billing errors, maddening voice-mail menus, and the need to spend lots of time and effort yielding little help from customer service.

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Solution:
Again, heed the voice of experience — but don’t expect too much. In our survey, Alltel, T-Mobile, and Verizon were the better choices in a bad lot for customer service. Only about 40 percent of their customers said these companies were very helpful, responding to queries and complaints about service issues — none too impressive. But only 21 percent of Sprint customers said the same thing. Sprint made news last summer when it terminated 1,000 subscribers for complaining too much about the service. Roni Singleton, a Sprint representative, says, “They were contacting us, in some cases, 100 times per month.We tried to resolve their issues, but they were still not satisfied, and it gets to the point where you say these customers may be better off somewhere else.”

If customer service isn’t helpful, file a complaint with your state public utility commission or consumer advocate.

Problem: Early-termination fees.
About one in seven survey respondents said they were seriously considering a switch to a better carrier but were discouraged from doing so by penalties that can run as high as $200 per phone line. Termination fees are especially onerous when a carrier keeps charging former customers a monthly service fee until they pony up the penalty.

It’s not clear what actual costs such fees are intended to offset. Cellular carriers variously claim that the fees are used to recoup handset and rate-plan discounts, unspecified “costs caused by early termination” and “transaction costs,” and even the capital investment in their wireless networks.

Scott Poynter, lead counsel in a class action suit against Alltel, which is based in Arkansas, says the carrier uses those fees to “hold its customers hostage.” He argues that if the fees recover real costs, why has Alltel charged the same $200 fee if the customer quits 23 days or 23 months into a 24-month contract? Alltel, which is contesting the lawsuit, declined to comment. Poynter says the carrier should shrink the fee proportionately as the contract matures. Last fall Alltel, AT&T and T-Mobile said they would join Verizon in doing just that. As we went to press, Sprint told us that it planned to announce prorated early termination fees in November.

Paul Weiss, lead counsel in class-action suits against Sprint, T-Mobile, and Verizon, says that the industry has collected several hundred million dollars in unjust penalties. “This is an enormous profit center for cell companies,” Weiss says.

Solution:
Attack this problem based on your specific circumstances. If you’re near the end of your contract, wait until it runs out before quitting the company. If you’re at the very beginning of your contract, take advantage of 14- to 30-day free trial periods offered by the carriers. They allow you to cancel a new account without penalties. After that, try to negotiate a waiver, especially if service quality has deteriorated, or you’ve moved to an area the carrier does not serve well or at all, or the company has been taken over by another carrier.

You might also consider transferring your contract to someone else by going to www.celltradeusa.com or www.cellswapper.com. For about $15 to $20, you can transfer a contract with the cell carrier’s approval. The person who takes over your phone and service becomes responsible for future payments, and you walk away. But remember, if you want to keep your current phone number, arrange that with your carrier before the transfer to avoid any potential complications.

Last, consider termination fees when choosing a company in the future. Since November 2006, Verizon has been prorating its $175 early-termination fee on its two-year contracts, but only by $5 a month. Even if you cancel the contract just days before it concludes, you’ll still be liable for at least $60. Last fall, AT&T and T-Mobile announced that they would prorate their fees starting in early 2008 but had not determined by how much at press time.

Problem: Mandatory extensions.
In the wake of legal actions, there’s movement on this issue, too, by some carriers. In September, the Minnesota attorney general, Lori Swanson, sued Sprint, saying that the company tacked on contract extensions of up to two years without proper disclosure or consent when customers made changes to their service plans. After that, AT&T and Verizon announced that they would join Alltel and T-Mobile in eliminating contract extensions when customers changed their plan. However, note that switching to some special promotional plans or getting a new “free” or discounted phone might still trigger a contract extension.

“In some cases, Sprint extended the contract when customers called to complain or to get new batteries or small repairs for the phone,” Swanson says. “So the allegation is consumer fraud.” Sprint denies the charges, but told Consumer Reports that it too planned to stop requiring contract extensions for plan changes. In our survey, mandatory contract extensions were most frequent among Sprint customers.

Carriers, however, still have other ways to lure you back into a contract term with offers of a sexy new phone or other inducement. Verizon, for example, sent direct-mail ads to some customers this year promising one “free” month of service worth $9.99 if they renewed their contract for another year; the fine print revealed that the supposed freebie put them back on the hook for a $175 early-termination fee.

Solution:
Be vigilant. Scrutinize contract details, your monthly billing statement, and any “free” offers or promotions.

For more great tips like these, visit www.consumerreports.com.


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