Consumers Union writes AT&T, Verizon, FCC about changes in wireless plans, presses companies to step up effort to notify consumers

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WASHINGTON — January 26, 2011 — Consumers Union, the nonprofit publisher of Consumer Reports, today wrote the chief executives of AT&T and Verizon and the head of the Federal Communications Commission (FCC) regarding the companies’ recent changes to their wireless plans and the need to alert consumers.

AT&T has made extensive changes to its text messaging plans and upgrade discount program, while Verizon has ended its upgrade discount program.

In separate letters to AT&T CEO Randall Stephenson, Verizon CEO Daniel Mead, and FCC Chairman Julius Genachowski, Consumers Union policy counsel Parul P. Desai said the companies need to step up their efforts to inform consumers about the changes and the implications for their pocketbooks, including any overage charges that may occur.

She said the companies should notify each customer affected by the changes individually and make all consumers aware of the specifics of the plans at the point of sale.

“In light of the tough economic times many consumers are facing, these companies need to provide greater transparency in, and disclosure of, these new plans and terms of service,” Desai said.

AT&T Wireless has dropped its $5/200 text messages-per-month plan and its $15/1500 text messages-per-month plan. The only options for consumers are $10 a month for 1000 messages or $20 a month for unlimited messages. AT&T has also changed part of its upgrade discount program, which allowed customers to upgrade their phone after two years and receive a discount of $50 or $100 off of the subsidized phone price. New customers no longer have this option, and current customers now have until July 23 to exercise this upgrade discount.

Verizon Wireless has discontinued its upgrade discount plan New Every Two, which allowed customers that were renewing their contracts to receive an additional discount on top of the subsidized price of the phone they purchased. Now current customers can only redeem the New Every Two benefit one more time, and they will not be eligible for it after that.

In her letter to the FCC, Desai noted that the agency is currently looking at cell phone “bill shock” and the need for greater transparency and disclosure of business practices. She urged the FCC to swiftly resolve these proceedings “so that all carriers would be required to appropriately notify consumers of rates, terms of service, overage charges and other relevant information.”

For more information contact David Butler at dbutler@consumer.org or 202-462-6262