Maryland Attorney General Douglas Gansler reached an accord with the four national cellular carriers and the leading handset insurer to improve disclosure of policy terms to consumers.
“Before deciding to purchase an insurance policy, Maryland consumers should clearly understand the terms of the policy,” said Gansler. “This agreement with the major wireless carriers and Asurion ensures that consumers actually will have seen all the necessary information before they decide to sign on the dotted line.”
The settlement – which applies to AT&T Mobility, Verizon Wireless, Sprint Next Corp., T-Mobile USA Inc. and Asurion in Maryland, but could have national implications – appears to address consumer concerns about receiving refurbished replacement phones. Handset insurance is said to cost subscribers $4-$5 per month, plus a $50 deductible.
While Asurion actually disclosed all the terms of the policy in the information provided to consumers, Gansler said he believed consumers were not completely aware of key provisions. As such, the settlement calls for those terms to be prominently highlighted, including in the brochure provided to customers who buy cellphone insurance. Moreover, according to the attorney general’s press release, mobile-phone carriers have agreed to implement measures to demonstrate the customer has had a reasonable opportunity to review these terms, such as obtaining the customer’s signature at a retail store or providing the customer with post-sale notification of both the insurance plan’s key terms and the customer’s option to cancel immediately without penalty.
Under the agreement, consumers will be informed of the following handset coverage terms at the point of sale: the monthly fee, the amount of any deductible, the kind of replacement equipment that may be provided, applicable limits on the number or value of claims and the cancellation policy.
Asurion also agreed to make a voluntary donation totaling $1.5 million to four Maryland charities affiliated with Sprint Nextel, Verizon Wireless, T-Mobile USA and AT&T Mobility.
Carriers reach deal with Maryland AG on insurance disclosures
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