House Subcommittee to Probe Wireless Industry
It's been a rough week in Washington for the wireless industry.
First the chairman of the Federal Communications Commission was rattling his saber about cracking down on wireless billing practices, and now a prominent House Democrat is pledging to expand an inquiry into the methods carriers use to collect unpaid bills from subscribers.
Ohio's Dennis Kucinich, who chairs the House Oversight Committee's Domestic Policy Subcommittee, announced on Thursday that he will open a probe into the use of a process known as mandatory arbitration to collect back debts.
Kucinich is taking aim at the service agreements that subscribers are required to sign, which often entail a waiver of the right to appeal, sue or join a class action suit.
The new inquiry follows an investigation Kucinich opened last year into the related practice of forced arbitration, through which wireless carriers lean on banks to collect past-due balances.
Kucinich said that nine banks have scrapped their debt-collection arbitration policies since a hearing his subcommittee held on the issue.
"The Domestic Policy Subcommittee investigated the practice of debt-collection arbitration and found that forced arbitration is arbitrary -- the results depend more on the arbitrator to whom the case is assigned than the facts or the law that applies," Kucinich said in a statement. "Now, the subcommittee will turn its attention to the cell phone service provides and see if the situation is any different there."
Kucinich has posted a chart (available here in PDF format) detailing the provisions of the customer agreements of 17 financial institutions that his subcommittee has been probing.
He's not the only one in town making trouble for the carriers. The same day Kucinich announced his inquiry, the FCC voted unanimously to begin the process of making rules to prevent so-called "bill shock," or the unwelcome surprise charges subscribers find on their wireless bills after they have exceeded their monthly allotments of minutes, text messages or data.