On April 4, 2008, Maryland Attorney General Douglas F. Gansler announced that his office reached an agreement regarding certain consumer protections with four of the nation’s largest wireless telephone carriers, as well as a provider of cellular phone insurance protection policies.  Under the agreement, key terms in the cellular phone protection plans will be more clearly disclosed to consumers.  Moreover, the four wireless carriers will be responsible for ensuring that consumers are provided with such information upon enrollment.

The agreement came about because the Attorney General’s office believed some consumers were not being adequately informed of the costs of the protection plans nor were they aware that replacement parts may be refurbished rather than new.  Specifically, under the agreement, consumer will be informed of the following key terms at the point of sale:  (i) the monthly fee; (ii) the amount of any deductible; (iii) the replacement equipment that may be provided (e.g., whether new or refurbished equipment); (iv) applicable limitations on the number or value of claims; and (v) the cancellation policy.  These key terms had been included in prior materials provided to consumers, but will now be more prominently highlighted in the brochures given to them.

To ensure that customers are provided with these key terms and have a reasonable opportunity to review them, the four wireless carriers will either obtain the customer’s signature at a retail store agreeing as such or provide the customer with a post-sale notification of the policy’s key terms with the ability to cancel without penalty.  Even though the agreement applies only to Maryland, Attorney General Gansler expects it will spur similar changes in other states.

Click here to review to the Attorney General’s announcement.