Oregon AG Files Action Against U.S. Cellular For Offering Bogus "Free" Phones To Oregon Consumers

May 23, 2008 -- Oregon Attorney General Hardy Myers today announced a settlement with the Delaware-based wireless provider of cellular phones and service, United States Cellular Corporation (U.S. Cellular), operating out of Illinois, and its subsidiary, United States Cellular Operating Company of Medford, an Oregon corporation. An Assurance of Voluntary Compliance (AVC) was filed by Myers in Multnomah County Circuit Court. The AVC admits no law violation.

The Oregon Department of Justice (DOJ) found that U.S. Cellular advertisements promised consumers "free" cellular phones without properly disclosing the prerequisite terms necessary, including the fact that consumers must first subscribe to certain and sometimes ancillary services and that consumers would be reimbursed for phone purchases through a rebate program. Consumers also complained to DOJ that cellular phone "minutes" were routinely accumulated as users accessed neighboring U.S. Cellular cell towers for service, but not reported until the following month, misleading consumers into believing they had more "minutes" available to them than they actually had.

Through the AVC reached with U.S. Cellular the company and its subsidiary agree to clearly disclose the terms of "free" offers, including whether or not a service subscription is required, all aspects and details of any rebate program, whether additional purchases are necessary, and the existence and amounts of one-time fees.

"Consumers need to know exactly what they are getting into when they accept any type of product promotion," stated Myers. "Today's agreement ensures that cellular customers will clearly understand their rights as consumers and that these promotions are fair."

DOJ worked with law students participating in the Willamette Law Clinic under the supervision of David Friedman, Adjunct Professor at Willamette University's College of Law, to investigate and prepare the case. The joint effort allows law students to learn firsthand the details of consumer protection law in Oregon under the direction of seasoned legal practitioners.

"Over the last two years, Willamette law students diligently worked to gather evidence and provided legal analysis that was critical to the successful resolution for Oregon consumers," stated Friedman. Today's settlement is the second in which Willamette Law Clinic students assisted DOJ in pursuing protections for consumers.

Consumers wanting information about this settlement or consumer protection information in general may call the Attorney General's consumer hotline at 503-378-4320 (Salem area only), 503-229-5576 (Portland area only) or toll-free at 1-877-877-9392. DOJ is online at www.doj.state.or.us.

Source: Oregon Attorney General

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