Monthly Archives April 2013

T-Mobile nailed for deceptive advertising

T-Mobile’s new contract-free offerings may not be all they seem. The carrier settled a lawsuit last week after allegations of deceptive advertising surfaced relating to their no-contract wireless plans.

Those plans, says the Washington State Attorney General, contained hidden early termination fees for those who purchased on a two-year payment plan. T-Mobile had advertised that none of its new offerings required consumers “serve a two-year sentence.”

“After an investigation of the company’s practices, the Attorney General’s Office learned that the company failed to adequately disclose that customers who purchase a phone using the 24-month payment plan must carry a wireless service agreement with T-Mobile for the entire 24 months or pay the full balance owed on phone if they cancel earlier,” stated an Attorney General press release.

“Consumers who cancel their wireless service face an unanticipated balloon payment for the phone equipment – in some cases higher than termination fees for other wireless carriers depending on how early they cancel. Instead of a ‘two-year sentence’ for wireless service, consumers face a different two-year ‘sentence’ to avoid a lump-sum balloon payment for the phone.”

T-Mobile will have to reimburse the AG’s office for over $26,000 in costs, and consumers who purchased T-Mobile service and equipment between March 26 and April 25 can get a full refund and cancel their plans without financial penalty, as long as T-Mobile’s terms of agreement are met.

Vacation scam calls increase

Ever answered your cell phone to hear a blaring boat horn on the other end? Or a peppy prerecorded voice proclaiming that you’ve won a free trip? If you have, you’re not alone. In fact, these types of fraudulent vacation calls seem to be on the increase, so much so that a Canadian wireless carrier has recently issued a warning to consumers.

While the scam has been around for some time, it appears to be continually resurfacing and often uses the name of a legitimate company. Usually the person who answers the phone hears a prerecorded statement suggesting they have won a free trip and if they stay on the line are connected with a person who attempts to solicit sensitive personal information. Sometimes the caller will trick the person into sending money.

Though usually the numbers appear to be North American, Telus has confirmed the caller ID has been spoofed and that the calls are originating from another continent. If you receive one of these calls realize they are a rip-off and hang up the phone immediately.

“It appears the scammers are using auto-dialers to call thousands of phone numbers – not just Telus customers,” states a company press release.

Ontario government pushes for wireless consumer protections

Even the government knows that cell phone bills get nasty. In Ontario, Canada, the provincial government is reintroducing legislation to protect consumers when it comes to wireless bill shock and confusing contracts.

In an announcement yesterday, Consumer Services Minister Tracy MacCharles said the legislation will be tabled next week. But it’s not the first time – a similar bill died last year when the session was prorogued.

If it is successful this time around, it would force carriers to spell out contract terms in plain language and better explain billing practices. Automatic renewal of contracts would be prohibited and consumers would be able to cancel agreements by giving adequate notice and paying set termination fees.

Several provinces in Canada have already enacted such requirements. However, carriers are speaking out against the move, saying they already do almost everything outlined in the bill.

Supply shortage hits Samsung S4

If you are hoping to get your hands on the new Samsung Galaxy S4, you might want to log on for pre-orders early. News broke this week that supply of the new device could be limited due to a chip shortage, coupled with high demand.

T-Mobile has pushed its launch to Monday, a five-day delay. Sprint will begin accepting pre-orders on Saturday, but expects its full product launch to be slightly delayed. Verizon began pre-sales Thursday, but announced it would not have handsets in stores until the end of May.

“Pre-order demand is much stronger than expected, so it’s difficult to rapidly boost supply in the short term,” Samsung president of strategic marketing Lee Don Joo, was quoted as saying.

The S4 is being officially launched in South Korea tomorrow and rolled out worldwide on Saturday.

AT&T reports first quarter earnings

The latest numbers in from AT&T suggest the U.S. is hitting its smartphone plateau, with the carrier reporting a loss of 69,000 devices from its contract plans in the first quarter. It’s the first time it has experienced such a downturn.

On the flip side, it added 365,000 post-paid tablets to plans, which usually carry lower monthly fees. Overall, earnings grew 3.2 per cent, with revenue dropping 1.5 per cent.

“The business environment is challenging, and the overall economy is challenging,” AT&T Chief Financial Officer John Stephens was quoted as saying.

Wireline revenues were down 1.8 per cent compared to the same period last year, and total business revenues were also down 3.4 per cent.

“Both reflected a slow economy and weak government and business spending,” states an AT&T press release. “Overall, declines in legacy products were partially offset by continued double-digit growth in strategic business services.”

Samsung could face fines for online malice

Think teenage bullies are the only ones on the attack online? You’re wrong. In fact, Samsung’s latest trickery in Taiwan could prove to be grounds for a nasty lawsuit. The tech giant is battling some bad press as of late after it came to light that Samsung paid students to post negative comments about competitor HTC online.

Taiwan’s Fair Trade Commission has launched an investigation into the accusations, something the agency appears to be taking very seriously. Samsung could be fined up to $835,000 USD if found guilty of false advertising. A marketing firm working with Samsung could also be held liable for the shady online posts.

“The case was set up last week after we received complaints,” Fair Trade Commission spokesman Sun Lih-chyun told a French news agency.

Who outed Samsung and its alleged dirty tricks? It was Internet-savvy consumers who apparently took note of irregularities in online articles – specifically a string of articles and reviews that blasted HTC and boosted Samsung – and reported their findings to authorities.

So far, Samsung has taken the denial route, saying it knows nothing of the investigation and possible legal ramifications. But it did stick a brief statement on its Facebook page the other day that seems to be a vague response to the controversy.

“Samsung Electronics remains committed to engaging in transparent and honest communications with consumers as outlined in the company’s Online Communications Credo. We have encouraged all Samsung Electronics employees worldwide to remain faithful to our Credo. The recent incident was unfortunate, and occurred due to insufficient understanding of these fundamental principles,” the company posted.

It  has also suspended all marketing involving the posting of anonymous comments, which leads one to wonder just how often the company uses this tactic online. Samsung has also pledged to educate employees about acceptable practices to prevent such a situation in the future.

It should be noted that it takes two to tango and it’s not the first time Samsung and HTC have faced off. Earlier this year, HTC drew ire after it crashed Samsung’s Galaxy S 4 launch in New York City, chatting up its own products and handing out hot chocolate to people standing in line. While staff at the event didn’t fib about their competitors’ device, HTC did come out the next day slamming Samsung publicly.

Legal battles aside, Samsung’s alleged actions have raised eyebrows and rightfully so. The ethics of marketing can sometimes be murky, but blatantly misrepresenting oneself is a major faux pas. However, it’s something that probably happens more often than we realize. Whether the reward outweighs the risk has yet to be seen, though we know that when consumers find out they’ve been duped the backlash is often ugly and extreme. It will be interesting to see how this case unfolds.

Sale of carriers could hurt Canadian consumers

With three small Canadian mobile carriers up for sale, analysts are warning consumers may take a hit to their pocketbooks due to decreased competition in the industry. It’s likely the carriers could be scooped up by bigger companies, or even merge into one.

“Either way prices will go up for consumers,” telecommunications reporter Rita Trichur was quoted as saying.

WIND Mobile, Public Mobile and Mobilicity have all struggled to gain market share since their introduction in 2009-2010.

Going up on the auction block hasn’t been the only big news for the small carriers lately. Earlier this month, all three withdrew from the Canadian Wireless Telecommunications Association, citing the organization’s consistent bias towards large providers as the reason for their departure.

VoIP providers eye changes to regulations

For the last 10 years, Voice over IP (VoIP) services have exploded in popularity. Every day millions of Americans rely on the service to make the majority of their traditional phone calls. Why are more and more people turning to the Internet-based service? Most will tell you that the lowered cost is the biggest selling point, especially when compared with fees for landline service. And it’s not just the residential sector that’s been affected – more businesses are eying VoIP as a viable alternative.

It’s a trend that’s been closely monitored by the Federal Communications Commission, which recently announced it would take steps to make telephone numbers more accessible to companies that offer VoIP services. In the past, numbers could only be obtained by state certified telecommunication carriers, meaning alternative carriers have been accessing numbers via accredited companies. Some of those companies have built their entire business around resale of services and numbers to VoIP providers.

But that’s about to change. A new trial will see Vonage – with 2.4 million subscribers in the U.S. – given access to 150,000 numbers that it can assign to customers. In turn, Vonage will report back monthly. If problems arise, the FCC retains the right to take back the numbers. While it is the only company that has been given the green light thus far, the FCC is considering opening up the process to more carriers.

Outgoing FCC chairman Julius Genachowski said the move would reduce barriers to innovation and competition for providers of voice services.

“Today these providers generally have to obtain telephone numbers through intermediate providers, raising costs and creating potential gatekeepers to the deployment of new services,” said Genachowski, in a recent statement. “Removing these barriers has the potential to deliver real benefits to consumers. It could help improve call quality thanks to fewer hand-offs for calls, and promote deployment of HD voice services. And it could fuel development of other innovative new products.”

The decision to allow Vonage to assign numbers was in response to a waiver request by the company. But it wasn’t without controversy. A number of organizations including the AARP, the Consumer Federation of America, and National Association of Regulatory Utility Commissioners – an association that represents state regulators – are arguing opening up telephone number distribution is ill-timed and ill-conceived. They claim a full proceeding is needed to determine how regulatory authorities will retain their ability to protect clients and consumer interests.

“Rather than rush to judgment in a way that creates a race to the bottom, we urge the Commission to take a moment to consider the long-term consequences of granting a waiver that effectively prejudges an NPRM (notice of proposed rulemaking) and undermines a long-standing framework that this Commission has depended on to prevent anti-consumer behavior,” stated a letter to FCC commissioners from the groups.

According to the letter, allowing providers who were not state certified to assign numbers is in contravention of the Telecom Act. There are also concerns that giving Vonage the privilege sets a precedent and opens the doors to others to do the same without due process.

“Poor management can lead to unnecessary exhaust of area codes requiring state-level relief proceedings and development of implementation plans that are costly and can have a negative impact on both consumers and commerce,” the letter warned.

However, the FCC maintains the move could help speed up the development of innovative services like HD voice. It is seeking feedback and comment on a number of related topics such as to whether interconnected VoIP providers should be able to access numbers, and how access can be eased for other services including IP access to emergency services, home security systems and text messaging services, to name just a few.

Petition calls for end to Verizon contracts

An online petition requesting Verizon ditch contracts is gaining steam, garnering over 90,000 signatures by Thursday. It could signal the start of a larger campaign by consumers to get wireless providers to abandon their traditional contract structures, similar to the recent move by T-Mobile.

Petition creator Mike Beauchamp, of Wichita, Kansas, pointed out that Verizon CEO Lowell McAdam has said if consumers made enough noise, he would be willing to eliminate contracts.

“Getting rid of carrier contracts is a win for customers,” wrote petition creator Mike Beauchamp, of Wichita, Kansas. “ … So here’s your chance: sign this petition to tell Verizon to end carrier contracts and create an affordable way for consumers to purchase their devices.

“If you’re a current customer, you don’t have to switch carriers or have plans to switch carriers. I’ve been a long-time Verizon customer and I don’t see myself ever leaving but I want that choice myself. I don’t want them making it for me and imposing stiff penalties if I do decide to leave.”

The petition aims to collect 150,000 signatures.

More Android security needed, says ACLU

The American Civil Liberties Union (ACLU) is lashing out at major U.S. wireless carriers, claiming they have not done enough to patch dangerous vulnerabilities in Android operating software. AT&T, Sprint, Verizon and T-Mobile were all named in the suit filed Tuesday, which calls for action from the U.S. Federal Trade Commission.

According to the ACLU, the carriers offer Android phones but rarely roll out security updates, a practice that leaves customers at risk of hacking attacks. It contravenes Federal Trade Commission provisions disallowing deceptive and unfair business practices, says the filing, noting customers should have the right to terminate contracts for phones that are no longer eligible to receive security updates.

“All four of the major wireless carriers consistently fail to provide consumers with available security updates to repair known security vulnerabilities in the software operating on mobile devices,” wrote analyst Christopher Soghoian, in the document.

“The wireless carriers have failed to warn consumers that the smartphones sold to them are defective and that they are running vulnerable operating system and browser software. The delivery of software updates to consumers is not just an industry best practice, but is in fact a basic requirement for companies selling computing devices that they know will be used to store sensitive information, such as intimate photographs, email, instant messages, and online banking credentials.”