A report released last month by AARP confirms what many of us here at TRAC have suspected for some time. Wireless consumers are fed up with getting locked in to wireless service contracts before they have a chance to see their first bills. Standard practice in the wireless industry is to give new subscribers a 14-day grace period starting on the day of service initiation. During the grace period, new subscribers can get out their service contract without paying an early termination fee (ETF), which generally runs between $150 and $200, depending on the carrier.

The problem here is that the grace period generally ends before the subscriber receives their first bill. As the AARP report notes, the biggest source of complaints from wireless consumers are billing and rate issues. Therein lies the problem. Consumers are most likely to want to leave their carrier over billing issues, but they aren't typically aware of any billing problems until they receive their first bill, which doesn't arrive until after the grace period runs out.

According to the AARP study, 65% of cell phone users said that it was important for them to be able to receive their first monthly bill before they decide whether to keep their cell phone service. In addition, 85% of wireless phone users would support legislation that would mandate a 20-day grace period after the subscriber received their first bill. This kind of common-sense legislation would go a long way towards helping consumers avoid the headaches that often come with wireless service.

Source: Telecommunications Research and Action Center: trac.org