QUIJANO & RILEY BILL TARGETING LANDLINE TELEPHONE RENTALS CLEARS ASSEMBLY COMMITTEE

QUIJANO & RILEY BILL TARGETING LANDLINE TELEPHONE RENTALS CLEARS ASSEMBLY COMMITTEE

(TRENTON) – Legislation sponsored by Assemblywomen Annette Quijano and Celeste Riley requiring phone companies to get each residential customer who rents or leases landline telephones to annually affirm their willingness to continue doing so was released today by an Assembly committee.

The bill requires companies to notify residential customers by first-class mail that they must agree within 60 days to continue the rental or lease agreement. This notification would have to be sent separate from regular statements or notifications, including regular billing or collections documents.

“Someone can buy a landline phone for $9.99 at Radio Shack, yet companies have been renting such telephones to people who most likely think they don’t have the means to buy,” said Quijano (D-Union). “Over the life of these contracts, some consumers pay enough to buy the telephones they rent many times over, without gaining any ownership of the equipment.”

“These agreements are inherently unfair, and are most frequently used by the most vulnerable members of our society,” said Riley (D-Cumberland). “This is an unfortunate practice and it’s time consumers were given the information, awareness and power to put a stop to it if they want.”

If the residential customer does not perform the required action to continue the rental or lease agreement within 60 days of receipt, the company must contact the customer and make arrangements for the return of equipment and the termination of the agreement.

During this contact, and for a full year after, the company may not in any way request the residential customer continue or reinstate his rental or lease agreement, or in any way market their services to the customer or provide any incentives to the customer.

Under the bill (A-3944), violations would fall under the Consumer Fraud Act. An unlawful practice under the Consumer Fraud Act is punishable by a penalty of not more than $10,000 for a first offense and not more than $20,000 for any subsequent offense.

Also, a violation can result in cease and desist orders issued by the Attorney General, the assessment of punitive damages and the awarding of treble damages and costs to the injured.

The bill was released by the Assembly Consumer Affairs Committee and now goes to the Assembly Speaker, who decides if and when to post it for a floor vote.

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