Hell to pay

An emerging subplot in the escalating early termination fee controversy is the harsh criticism that’s surfacing in federal lawsuits over the impact on consumer credit ratings when a dispute arises over such charges. It raises questions – separate from legal, economic and public policy issues that took center stage at a Federal Communication Commission hearing on June 12 – about the relationship among wireless service providers, collection agencies and credit rating bureaus.
But the credit issue is actually broader in the wireless space, extending to conflicts over other disputed charges and in turn when a monthly bill is deemed overdue. Put another way, can a consumer have a dialogue over billing charges with a mobile-phone operator and not risk that contesting a few cents or a couple bucks will turn into a matter of financial free fall? It is a question that gets into how closely wireless carriers, collection firms and credit rating bureaus communicate with each other during the inherently fluid process of dispute resolution. In one recent lawsuit, it appeared the consumer got caught in the middle – with serious financial consequences – because those stakeholders were never on the same page insofar as having the most up-to-date information provided by the consumer.
Why is this important? Quite simply because a consumer’s credit worthiness is on the line, which can affect an individual’s ability to secure a loan for a car, a house or a credit card. If a consumer has a solid track record of paying bills on time and not languishing in massive debt, why should a spat over a wireless charge – an ETF or a third-party content fee – set in motion powerful forces that only grow stronger, increasingly convoluted and ultimately unstoppable, leading to a citizen’s financial ruin. Aside from the inequities involved, it cannot be good for the economy if legitimate consumers are sidelined. Deadbeats are another story.
Sen. Hillary Rodham Clinton (D-N.Y.), according to a Federal Election Commission filing, owes more than $162,000 to AT&T Mobility and about $5,500 to Verizon Wireless stemming from her presidential run. What are the odds she’ll be hassled by a collection agency or have her credit rating trashed? Sen. Amy Klobuchar (D-Minn.) probably wouldn’t mind having another high-profile lawmaker sponsoring her wireless consumer protection bill.