Cellphone Lemon Law Passed by US State Legislature

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The Illinois House has passed a "cellphone lemon law" which would enable consumers to break their contract without financial penalty if their handset develops a fault on three or more occasions. The lawmaker's bill also offers consumers the option of upgrading or downgrading their phone model by paying or being refunded only the difference in cost based on promotional prices also without incurring penalty charges.

A proposal which would have required a mobile phone operator to pay a consumer $25 for each day the handset is unavailable to the consumer or each day the consumer does not have full access to all of the contracted services was rejected.

"When someone buys a cellphone that turns out to be defective, they have to go back to the provider for a repair or replacement," said Rep. Susana Mendoza, the politician who promoted the law. "When this happens repeatedly, it burdens customers both in terms of time and money lost, but also with increased frustration. Cellular providers have an insufficient incentive to be responsive because the consumer is usually locked into a long-term contract."

The House bill, which was approved by a 72-to-43 margin, now heads to the Senate for consideration.

"Wireless consumers have an abundance of choice when it comes to hand-held devices and surveys consistently show they are satisfied with both the operation and functionality of their handsets. It is the rare exception and certainly not the rule for a device to malfunction," said Joe Farren, a spokesman for national cellphone association CTIA. "Because the market for wireless handsets is so competitive, every manufacturer has a huge incentive to produce an exceptional device. If they don't, they won't be in business for very long. I can't imagine a greater 'regulator' than that."

On a related front, the California Consumer Federation applauded a Californian Senate committee's passage of a cellphone consumer protection bill.

"The cellphone industry ranks No. 1 among all industries in consumer complaints filed with the Better Business Bureau," said Richard Holober, executive director of the Consumer Federation of California. "Consumers have put up with deceptive contract terms, poor phone reception, excessive early termination fees and inadequate customer service for long enough."

The bill's author claims industry consolidation is hurting consumers. "Cellphone companies are merging, competition is decreasing, customer service is deteriorating, and yet California cellphone subscribers have little or no protection against industry abuses," said Sen. Alan Lowenthal.

Some cellular carriers have voluntarily moved to enact to varying degrees some requirements in the Lowenthal bill."

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