Released: April 25, 2006

When good cell phones go bad

Source: By Burt Helm, BusinessWeek

Sarah Struck, 24, was caught by surprise when her six-month-old Verizon Wireless mobile phone began malfunctioning. It would conk out after mere minutes of use and then couldn’t pick up a signal, even in cell-tower rich midtown Manhattan. But when she tried to take it into a Verizon Wireless store to get the malfunctioning phone replaced, she was in for a real shock.

The store wouldn’t exchange or fix the phone, and the sales associate said she was to blame for the malfunctions, she says. “They told me I’d dropped my phone in water,” she says. “But that never happened.” Her options included buying a new phone at full retail price, signing up for another two years of service with Verizon Wireless, or simply terminating the plan and paying a cancellation penalty of $175.

She considered buying a low-end phone instead, but the cheapest one in the store retailed for $160 and she was reluctant to lock herself into another two-year contract. “I felt like if there was a problem with the phone, it should be their responsibility to replace it,” she says. “I didn’t do anything wrong.”

Struck’s dilemma is one facing luckless cell phone customers all the time. A phone dies or gets lost, broken, or stolen. If it’s uninsured or the malfunction isn’t covered by a policy or warranty, the customer has to pay either a high contract-cancellation fee, or more for the replacement than the original.

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