Cell Phone Overcharges Affect Consumers’ Credit Reports

Consumer Alert

1st Quarter 2011 brought the announcement that AT&T beat out Sprint in the competition for T-Mobile, the first big cellular merger since Sprint acquired Nextel. When your cell company is acquired by another carrier, accounting errors can happen. When they do, you may pay too much or suffer a hit to your credit rating, hence this consumer alert.

When Sprint acquired Nextel, this commentator’s Nextel account was closed, and a Sprint account simultaneously opened. The closure of the Nextel account triggered an early termination fee on each of two lines. When the bill arrived, customer service promised to reverse the charge and it was gone from the next invoice. But Sprint sold the written-off charge, as bad debt, to a collections company. This led to a seven-year battle with Sprint, to reverse the erroneous credit reporting and repair the tarnished FICO score.

If you are a customer of T-Mobile, or any subsequently acquired cellular carrier, keep an eye on your bill and report any questionable charges immediately. Then, unfortunately, you’ll also have to keep an eye on your credit report.

If you are overcharged and cannot resolve the issue with the company (Sprint’s employees said it was out of their hands; the matter was escalated to a VP before being resolved), file a complaint with the FCC at fcc.gov, call toll-free 1-888-225-5322 or send a fax to 1-866-418-0232. You can also write a letter and send supporting documents to: Federal Communications Commission, Consumer & Governmental Affairs Bureau, Consumer Inquiries and Complaints Division, 445 12th Street, S.W., Washington, D.C. 20554.

Know that 47 U.S.C. ยง 415 provides a two-year statute of limitations on telecommunications charges, “(a) Recovery of charges by carrier. All actions at law by carriers for recovery of their lawful charges, or any part thereof, shall be begun within two years from the time the cause of action accrues, and not after”. Want an exercise in futility? Just try explaining that you didn’t owe anything in the first place when the collection company calls and, even if you did, the complaint is now time barred. Statutes of limitations don’t stop collectors from harming your FICO score, but erroneous reporting may give you causes of action against them for violations of the Fair Debt Collection Practices Act, and libel.

The best way to protect your credit rating is to not give out your social security number. This advice isn’t limited to cellular companies. When choosing a company to do business with, ask yourself why they need your social? Companies collect this type of data for a purpose: To gain leverage over you. Find a competitor who will do business with you fairly, without putting you at a disadvantage at the outset of the relationship.