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David Bach The Automatic Millionaire

David Bach, The Automatic Millionaire

Ten Steps to Cell Phone Security

by David Bach

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Excellent (2275 Ratings)
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Posted on Monday, April 23, 2007, 12:00AM

Americans love their cell phones -- most of us can't live without them. Yet the Better Business Bureau reports that cell phone providers are the No. 1 cause of complaints among consumers.

This is mostly due to incorrect billing, confusing fees, unexpected charges, and deceptive contracts. These can certainly add up, but I was shocked to learn that the most significant -- even devastating -- monetary damage can occur when your cell phone is lost or stolen.

A $26,000 Cell Phone Bill

A recent CBS 5 ConsumerWatch report by Jeanette Pavini profiles the plights of three consumers in California -- all of whom had their cell phones stolen and were left stuck with a huge bill for unauthorized charges.

The report told the story of San Francisco resident Wendy Nguyen, who was shocked to receive a bill for $26,000 after her cell phone was unknowingly stolen before she left for an overseas vacation. Cingular held her responsible for charges incurred after the phone was taken, up until the time Wendy discovered the theft and called the carrier.

She was able to prove via airline and passport documents that she was out of the country and couldn't possibly have made the unauthorized calls from San Francisco during that time, but Cingular still held Wendy accountable for all charges.

Not only that, they advised Wendy that if she couldn't pay the bill she should consider filing for bankruptcy!

Adding Insult to Injury

Eileen Perrera's story revealed what happened after her phone was stolen while she was on vacation. She filed a police report and contacted Sprint immediately, but then received a bill totaling almost $16,000. Sprint claimed to have never received the call from her reporting the stolen cell phone.

Eileen was able to submit proof from landline phone records that she had indeed called Sprint customer service. As her late fees piled up, the situation remained unresolved for months.

Then there's Pamela Woodson's story. As revealed in the CBS 5 ConsumerWatch report, when Pamela's cell phone was stolen she reported it the very next day. However, by that time her account had already incurred over $1,800 in unauthorized charges. Due to the suspicious nature of the fraudulent charges, she was actually interviewed by the FBI -- and cleared of all responsibility. Nevertheless, T-Mobile pressed on, insisting she pay the outstanding charges in addition to late fees and interest.

Can This Be Legal?

If you dig through all the fine print in your cell phone contract, you'll most likely discover a statement that reads something like this: "Should your cell phone be lost or stolen you are responsible for any costs incurred for unauthorized calls made prior to reporting the cell phone missing."

Unlike a credit card, cellular contracts are not required to limit liability for fraudulent charges. But it's also important to realize that the extent of your liability as stated in your contract is your provider's policy -- it's not a law.

The laws that give consumers the right to dispute unauthorized charges vary from state to state. In states where the laws do exist, they're not doing much good because there's no single independent agency set up to review evidence, enforce the laws, and provide a timely resolution.

Why? It all comes down to money. In California, for instance, the significant financial contributions made by the wireless industry to state government gives the telecommunications industry enormous influence over entities like the Public Utilities Commission. In effect, this allows the wireless industry to make up its own rules.

Avoiding and Responding to a Theft

Are we at the mercy of an unregulated industry that's free of consequences and penalties? Not if we learn how to defend ourselves.

This year, an estimated 600,000 cell phones will be reported lost or stolen. Here are the 10 things you need to know to protect yourself from cell phone theft and fraudulent charges:

1. Guard your cell phone like you would your wallet.

Yes, this is obvious advice, but frankly the best way to not get stuck with fraudulent charges is to do what you can to prevent unauthorized calls in the first place.

On a related note, think twice about what information you store on your device. A stolen cell phone can not only lead to a huge bill, but to identity theft as well.

2. Password-protect your device.

Check the user guide that came with your phone and start using the "lock" or "password" feature to potentially prevent a thief from making unauthorized calls. There are ways to override passwords, but at the very least you might be buying yourself some time until you discover the loss and call your provider.

3. Don't be fooled by cell phone insurance.

Purchasing cell phone insurance will provide coverage for the device itself, but it won't protect you against charges for unauthorized calls.

4. Call your cell phone provider as soon as you discover the loss.

Report your missing device, and be sure to keep meticulous records including the date and time you called your carrier, the name and ID number of the representative to whom you spoke, and what you were told.

Also note the state or region of their call center, plus their telephone extension number. Finally, ask for confirmation in writing that your device has been disabled. Some companies can even email this to you.

5. File a police report.

This may not help your chances of getting the stolen phone back, but it still provides an official record of the crime. Your carrier may even require the police report number when you phone in the loss.

6. Open an investigation with your carrier if necessary.

If you find that you're not getting an immediate resolution by working directly with your cell phone company, don't waste another minute. Call your carrier and request an investigation, then follow up in writing. Generally, requesting an investigation gives you a better chance of preventing any formal collections action to be taken and should also delay reporting to any of the credit bureaus.

When you request an investigation, advise your carrier that you'll be filing a complaint with the Federal Communications Commission (FCC), your state attorney general's office, and your state's public utility commission (PUC). Your carrier is more likely to pay closer attention to you when they know you're an informed consumer.

According to a 2006 AARP/Roper cell phone survey (of adults 18 and over) 48 percent reported not knowing who to call in the event their cell phone carrier could not resolve a billing or service problem to their satisfaction. Items 7 through 9 below shed some light.

7. Contact the FCC.

The FCC will forward your complaint to your service provider, requiring a response from them within 30 days. You can contact them via their web site or call them directly at (888) 225-5322.

8. Contact your state attorney general's office.

According to ConsumersUnion.org, state attorney general offices will handle complaints about cell phone fraud and contract disputes. This office has filed lawsuits against wireless companies based on consumer complaints, resulting in refunds to consumers and agreements by some companies to reform certain practices.

Find the contact information for your state attorney general's office here.

9. Contact your state's PUC.

Each state has a government agency, usually called a public utility commission, that oversees telephone companies. To locate your state's PUC online and to file a complaint, visit the National Association of Regulatory Utility Commissioners web site.

10. When all else fails, contact the media.

The wireless companies are particularly adverse to negative media attention, so until effective laws are put into place you may have to resort to contacting your local TV station.

In Wendy, Pamela, and Eileen's cases that's just what they did, and their stories all have happy endings. After many months of persistent determination and followup, all fraudulent charges were dropped. It seems the wireless industry wants to do the right thing after all -- as long as they're forced to by the media.

Ultimately, CBS 5 ConsumerWatch played a huge role in getting each situation resolved. But don't be tempted to skip steps 7 through 9. The FCC, state attorney generals offices, and PUCs all need to see how serious a problem this is, so formal complaints serve an important purpose.

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265 Comments

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  • DAVID - Saturday, April 28, 2007, 10:32AM ET  Report Abuse

    • Overall: 5/5

    Good advice

  • Durairaj - Thursday, April 26, 2007, 9:12PM ET  Report Abuse

    • Overall: 5/5

    If you are too concerned : put the extra bucks on good unlocked phone and go for prepaid! Let those thieves recharge if they want to talk more. Getting out of those messy carrier contracts will also make them think about consumers.

  • LisaM - Thursday, April 26, 2007, 12:46PM ET  Report Abuse

    • Overall: 3/5

    If you don't have a cell phone, you can't have problems with losing it or having it stolen. How many people actually NEED cell phones? I mean as in truly need to be reachable 24/7. So why not skip the cell phone and skip the risk? I don't have one. If it's that important, it probably involves emergency services and a 911 call. Anything else can just wait.

  • Betsy - Thursday, April 26, 2007, 1:35AM ET  Report Abuse

    • Overall: 5/5

    Talking to Sprint is a waste of time. I was getting telemarketing calls like crazy, and being charged for them. I talked to Sprint. "Nothing they could do." I asked one of the telemarketing reps how they got the number. They "bought a list from the carrier" was the response. True or not? Don't know but we switched carriers that day.

  • Melissa - Wednesday, April 25, 2007, 2:21PM ET  Report Abuse

    • Overall: 3/5

    The FCC is your best bet when your cell phone service provider isn't getting the point as long as you have a valid argument. A few years ago I had marketing calls coming into my cellphone (which is illegal) with a recorded message from the same three numbers. I called Verizon who naturally, didn't do anything and didn't care about the problem. They did refund me a few minutes for the hassle. Finally, I went to the FCC website and reported the problem on a convenient web form including all the phone numbers, times and dates of the calls and within a week, it stopped cold. The FCC shocked me, but they really are the "phone-police" and are the ones who have enough power to influence cell phone providers into doing the right thing.

  • jthomp1286 - Wednesday, April 25, 2007, 2:05PM ET  Report Abuse

    • Overall: 5/5

    This is excellent information. I had no idea that cell phone theft took place on such a scale. I'll keep this information in mind should my cell phone ever become lost/stolen. Every cell phone owner should read this.

  • jill - Wednesday, April 25, 2007, 10:43AM ET  Report Abuse

    • Overall: 5/5

    This is good to know. I lost my cell phone for an entire week. It did finally turn up but I wasn't the least bit worried about fraudulent charges - just assumed I wouldnt be liable. Glad it has a happy ending...lucky.

  • ted - Wednesday, April 25, 2007, 10:34AM ET  Report Abuse

    • Overall: 4/5

    Good info, thank you. Amazing what the cell phone companies can get away with.

  • max - Wednesday, April 25, 2007, 9:58AM ET  Report Abuse

    • Overall: 5/5

    Thanks for the warning. I will pass it on. As soon as my last cell contract expired, I switched to a pay as you go phone. No hassles...no huge bills with unexpected charges...life is good!

  • jon - Wednesday, April 25, 2007, 9:52AM ET  Report Abuse

    • Overall: 5/5

    This is great advise. I've had problems with 2 different carriers in the past and it is definitely not as simple as making a phone call to customer service. It's more like talking to a brick wall to get things resolved. About 2 years ago, I disputed some charges on my bill that added up to a little over $100. I got so frustrated with the lack of help from my carrier at the time that I wound up just paying the bill so that I could get on with my life. I couldn't figure out how to resolve it otherwise. Thanks for this article. I think it's very helpful. John

  • Jenna - Wednesday, April 25, 2007, 9:45AM ET  Report Abuse

    • Overall: 5/5

    Great article. I would also recommend calling your carrier and requesting a ban on all international calls from your cell phone. Seems like most of the charges that could be run up are for international calls.

  • Cey - Wednesday, April 25, 2007, 4:11AM ET  Report Abuse

    • Overall: 1/5

    I think this is an horrible article.... as we all know this is all opionion.......... I personaly have had a cell phone for 12 years and I have delt with three differnt cell phone companies the worse has been Sprint I had bills ever month for things that I had not evern done and what made it even worse was they allowed someone to get a phone on my account that i did not even know............ however due to loyality i stayed even when i started working for another cell phone company (i have happily been gone from sprint for a year )...... Just an suggestion..READ YOU CONTRACTS PEOPLE...... I have worked in customer serivce for years and i was taught ot never sign my name to anything unless i have read it and i still live by that rule.... yes i work for Verizon Wireless and there are good and policies for every company and good an bad cust service reps...... however the only person who is typially at fualt in any billing situation is the CUSTOMERS...........NOT READING CONTRACTS..............and GIVING PHONES TO CHILDREN...............at some point people have to accept responsibilty for what happens and any billing issues that they have...........In the case of a stolen phone honestly if you are traveling out side of the country make sure you have your phone ...............when you discover that you dont have your phone call an get your phone suspended it only takes moments to do so.........you can always request info on your carriers lost and stolen phone policy it is not th carriers fault that your phone is broken or stolen you signed a contrat it is just like any other contract that you sign it is binding..............PEOPLE ARE SO QUICK TO SIGN THEIR NAME THAT THEY DON'T PAY ATTENTION TO WHAT THEYARE DOING...... PEOPLE DONT TAKE CELL PHONES SERIOUSLY........... being ignorat of what and where you sign your name is the ending cause of all the issues that people have with cell phone companies...... THERE IS ONLY SO MUCH THAT CAN BE PLACED ON THE COMPANY THE THEN YOU HAVE TO SAY IT IS USER/CONSUMER ERROR AND ISSUE NOT THE COMPANY............so next time read before you sign and remeber that it is a bill that will take a toll on your credit if you dont be responsible and lastly.........LEARN TO READ AND STOP BLAIMING THE COMPANIES BLAME YOURSELF.......

  • Yahoo! Finance User - Wednesday, April 25, 2007, 4:05AM ET  Report Abuse

    • Overall: 3/5

    As far as being able to call the President of a cell phone company goes, unless you have a personal relationship with that person, that just doesn't happen in 10 minutes. The agents that take the customers calls range from 18 to 65 and all go through extensive training. They are inundated with continuing education in a non stop environment of continuing education. The demographic of these representatives is usually of citizens with limited education, and they are doing their best. I think anyone who gripes about there customer service should take on the challenge of thier jobs for one day, and then you may have a greater understanding what it can be like to be yelled at for little more than minimum wage. In any business there will never be 100% satisfaction. As a human being you can only strive to do your best. For every upset customer there are 100 that are pleased as punch. Other wise we would all throw these wondertoys into the nearest body of water and stay tethered to a landline. Anything is fixible if you exercise patience and if you are an educated consumer.

  • Yahoo! Finance User - Wednesday, April 25, 2007, 3:03AM ET  Report Abuse

    • Overall: 1/5

    terrible story.what idiot would allow a thief to charge this kind of money which takes hours and probably days to run up a large bill?.how long would it take this looser to discover the cell phone is missing? it happened to me and guess what???? immediately i called THE OFFICE OF THE PRESIDENT of my cell phone co. and resolved it in less than 10 minutes.

  • Yahoo! Finance User - Wednesday, April 25, 2007, 2:40AM ET  Report Abuse

    • Overall: 5/5

    Those of you who "used to work in customer service" and say that if you call the cell phone company and explain what happened, they will fix it are wrong. My experience with Verizon (and I will NEVER be a Verizon customer again) has been continual calls, emails, and letters to cust. service where the Verizon person says they will investigate and respond to us. That's all they ever do - no answer or response of any type has ever come back, other than to say "we'll get back to you." Look now at Verizon's Customer service agreement: http://www.verizonwireless.com/b2c/globalText?textName=CUSTOMER_AGREEMENT&jspName=footer/customerAgreement.jsp Go to the paragraph about lost / stolen phones. If you report a phone lost / stolen, you have 30 days to either pay the $175 line cancellation fee or buy and activate another phone (knowing full well enough people will buy phones from them) or they will TURN YOUR SERVICE BACK ON! Even though your phone is still missing. We have now been referred to a collections agency, and have had negative credit reports filed against us, even though Verizon was legally obligated to answer our disputes prior to taking those actions (see the Fair Credit Reporting Act). And NO, you don't have the right to sue - you are obligated to go to arbitration. We may yet do that, but have openned a case with the Attorney General's office and will see how that plays out first. If you find yourself in this situation you have to fight. Verizon and others depend on wearing you down until you give in. Then they win. I'm all for capitalism and free markets, but a contract does not give you the right to exploit someone's misfortune in order to collect extra money from them under the threat of exposing them to more criminal activity (namely pay up or else we'll turn your phone back on so crooks can clean you out - and we'll keep all the profits when they do!).

  • John F - Wednesday, April 25, 2007, 2:13AM ET  Report Abuse

    • Overall: 1/5

    I would not rate this very poor except that the writer never mentioned that pay as you go phones avoid all this!!! Police reports? FCC? Carrier? State Govt? Attourney Generals? Media??? My god.......is this the inventive america reduced to a culture of whiners???? I am american by the way, and in some things we are certainly ignorant. It has taken me many years and 7 cell phones to figure out that pay as you go is the way to go. With some companies you can have a SIM card just as in most other countries in Europe and Asia. ( the largest cell phone markets) With a Quadraband phone that you must buy....you simply change the Sim card for each country. That card has a pre-paid amount......In the event that your phone is stolen.....you simply loose the phone and whatever amount was on your sim card. In some countries you can also register the SIM number and not loose your number! You avoid any monthly fees and are under no contract.... Isnt this a lot easier and more responsible than contacting every possible agency and tying up the works which will just add to the cost of what you have already lost?

  • robyn r - Tuesday, April 24, 2007, 11:54PM ET  Report Abuse

    • Overall: 2/5

    I could see this happening with ANYTHING that is stolen not just cell phones. If you keep your cool and talk to the customer service rep like an adult, provide the proper paper work they will credit your account, it may take some work (which is not fare but reality) it will get done. I agree with using the passcode feature on your phone (put be care not to lock it up) I have sold phones for years and not once have I not been able to help my customers. If the person is not helping you, don't fight with them just find someone who will help you. As for not liking cells phones b/c of the reception, they are what they are, the signal travels through the air not a wire, anything can and will effect it, if security is what you want, stick to land lines. If the public would not demand the product it would not be supplied. We are our own worst enemies.

  • Yahoo! Finance User - Tuesday, April 24, 2007, 11:39PM ET  Report Abuse

    • Overall: 5/5

    THIS IS FANTASTIC!!!!!!!!!! Cell phone companies are a bunch of crooks!!! It's horrible when you call these cell phone companies customer service departments,most of the time these call center reps do not know what they are saying,nor do they care,they are just there to get a paycheck!! And regarding the unlawful use of someones cell phone if the customer can prove that they did not rack up the charges then the cell phone companies need to shut up and pay it,or write it off!! Big cell phone companies can do this!!! Don't let them fool you!!!!!!!!!!!!!!!!!

  • Belle - Tuesday, April 24, 2007, 11:28PM ET  Report Abuse

    • Overall: 4/5

    I had no idea of the magnitude of what could happen. I lost mine only Saturday in New Orleans' French Quarter and did nothing stated in this article. Fortunately I did get it back Sunday, someone left a message on the last number I dialed. But had I read this article last week, I clearly would have been worried and would have taken action immediately.

  • Vide - Tuesday, April 24, 2007, 11:27PM ET  Report Abuse

    • Overall: 5/5

    That's an amazing story right there, and I agree that you should tell everyone you know about this. That's a LOOOOOTTTTTT of money to spend just because your phone is stolen.

  • TomC - Tuesday, April 24, 2007, 11:23PM ET  Report Abuse

    • Overall: 5/5

    I really needed this!

  • Michael - Tuesday, April 24, 2007, 11:11PM ET  Report Abuse

    • Overall: 1/5

    I have to disagree with bullet point number 9. Cell phones are not legally considered a utility. The high taxes you pay are due to the fact the government still considers them a luxury item at taxes your service as such. Your state PUC currently has no legal authority over your cell phone company and will not until the laws are changed.

  • kim - Tuesday, April 24, 2007, 11:04PM ET  Report Abuse

    • Overall: 1/5

    I have worked for cell phone companies in the customer service area. I know for a fact that all the training we receive is based on making the customers happy. Although I do realize not all customer service reps follow those rules, there are plenty of us out there that do, and this whole story only prevents the will to do so. This only causes unnesassary friction between the consumers and cell phone companies. I understand the inconvience some fraudulent charges may cause, but everytime a call center receives a call related to this issue, we are required to suspend the phone immediately, review the past bills to ensure that the numbers called were not called previously before the theft, and investigate recent calls made (although it is against FCC regulations to release unbilled information, which is why cell phone companies created their websites). Once all this is done and we see that the customer is truely not at fault (especially as stated in this story, that lady had proof of her tickets) if that information is faxed in and we submit a case regarding a refund, it would definitely be approved. It is not the cell phone companies nor the CUSTOMER SERVICE REPRESENTATIVES fault consumers sign their name to something that they DON'T EVEN READ. But of course there are always those people that feel like they are high and mighty because they cussed out someone over the phone regarding the bill or some other complaint they may have about their service. Honestly people, if you want anything done, keep your attitude out of the picture and you may just get exactly what you were calling in for. Or better yet, READ THE MANUELS and SERVICE AGREEMENT to begin with. [what a rant, huh]

  • Chris - Tuesday, April 24, 2007, 10:58PM ET  Report Abuse

    • Overall: 5/5

    Crooks. They're all just a buncha crooks. What is 25,000 bucks to them when they're a huge cell phone company with billions of dollars? They're basically robbing people and will eventually cause themselves more hurt than help in the long run.

  • Sherry E - Tuesday, April 24, 2007, 10:56PM ET  Report Abuse

    • Overall: 5/5

    email this to everyone you know. This is incredible!!!

  • Aaron K - Tuesday, April 24, 2007, 10:54PM ET  Report Abuse

    • Overall: 1/5

    In the first example the woman clearly gave it to a relative.. the second was cleared with no more than a credit card company would give you.. the author is an alarmist, and I hate cell phone companies (mostly for the coverage)... his information is misleading and actually probably liable if you dig deep enough...

  • Rissa - Tuesday, April 24, 2007, 10:40PM ET  Report Abuse

    • Overall: 5/5

    wow thats outragous very good information to know.

  • Pat C - Tuesday, April 24, 2007, 10:34PM ET  Report Abuse

    • Overall: 4/5

    Go prepaid and don't pay the high prices. Your coverage is that same and with my service it is actually better. They can steal my phone and all I lose is a cheap phone and the minutes I prepaid. I can go and get another phone and start over.

  • Shawna A - Tuesday, April 24, 2007, 10:31PM ET  Report Abuse

    • Overall: 2/5

    I think Cingular is the best cell phone service out there. Sprint for sure sucks...S.

  • jasper - Tuesday, April 24, 2007, 10:20PM ET  Report Abuse

    • Overall: 5/5

    This kind of thing should never happen in this country.

Showing comments 6-35 of 265<< PreviousNext >>

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