Gov't tries to make cellphone deals fairer for customers

From May, deals limited to 18 months instead of 36.

Cellphone 224.88 (photo credit: Bloomberg [file])
Cellphone 224.88
(photo credit: Bloomberg [file])
Does this seem like a familiar scenario? You walk into your local cellphone store, wanting to fix your broken phone. You are told by the sales representative that to fix the phone you will be charged hundreds of shekels, but that the company is more than willing to enlist you in a new plan, which actually will not cost you anything. That's just one of the ways cellphone companies entice customers to sign up for new services, whose full cost only become apparent later on (whether later in the sales pitch, or in the bill). In the case of one consumer who spoke to The Jerusalem Post, the "catch" involved being signed up to a minimum NIS 20 monthly subscription to 3G wireless Internet service. Attorney Yaron Levinson, head of the Histadrut's consumer authority, said he hears complaints about these kinds of tactics all the time. "Not a day goes by without our receiving some sort of complaint related to the communications industry," said Levinson. Zev Gold, of Jerusalem, told how his parents had wrangled with the Pelephone company to receive a deal that would be free - as long as they did not speak on the phone. "Three years passed with no charges, and they lost the phone in the meantime," related Gold. "After three years they received a bill from Pelephone for NIS 40. After two hours on the phone... they found out that [Pelephone] changed the rules, and that there is a charge of 40 shekels just for having a line. After a lot of arguing [Pelephone] dropped the charge. "Two months later another 40 shekel charge was sent. It was settled only when my mom went to them and canceled the phone." Another Jerusalem consumer, who asked to be identified only as David, was signed up for what was presented as a highly attractive deal including a "free" additional phone, with a separate number of its own, for a family member of his choice. He told the salesman he really didn't need another phone, but was assured there was nothing to lose, since it wouldn't cost him anything even if it were never used. When the bills came, however, it became clear that while the phone itself was indeed "free," there was a charge for having the line. After a brief argument, the charge was canceled and the phone was returned. Data from the Communications Ministry shows that only 26 percent of cellular customers switch to a different company, meaning that once a company has a customer, it is likely to keep him or her for life. The Israel Consumers Association (ICA) says the cellular market is one of the primary sources of consumer complaints. Issues that are regularly raised include contracts that are ambiguous or whose terms are changed after a certain time; the selling of 3G Internet service in places where the service isn't even covered, or to elderly who don't understand how to use the Internet; and even the signing of minors to cellular subscriptions without notifying their parents - until they receive the bill. The Communications Ministry has taken a number of steps to enhance competition in the cellular market, most notably the decision that went into effect last December to allow customers who switch from one company to another to retain their previous phone number. Another recent measure limits the length of cellular contracts to a maximum of 18 months, so that customers can switch after that period without exit fees. Currently, almost all cellphone contracts in Israel (in contrast to the practice in North America and Europe) are for three years, which is often longer than the lifetime of the phone. The ministry's new regulation will go into effect by the end of the month. Communications Minister Ariel Attias expects the new regulations to make it easier for customers to switch cellular companies. "This should bring about more competition, cheaper prices and better service," he said in a statement. Consumer advocacy groups are happy about the new regulations, but say much more needs to be done. Levinson said the inherent nature of the cellular industry, which provides a whole host of services other than communication, including photography, Internet and music, means that the consumer is often at a loss to precisely identify the costs he or she is incurring. The ICA has drafted a contract, which it has sent to the phone companies for their voluntary adoption, and to the Communications Ministry, to consider mandating the contract.