Cingular: Can't Pay Your Fraudulent $26,000 Bill? File For Bankruptcy.

Wendy Nguyen’s cellphone was stolen shortly before she left on an overseas vacation. When she returned she was shocked to discover she had a $26,000 cell phone bill. She called Cingular to dispute the charges, but even though she was able to prove she was out of the country when the calls were made from San Francisco, Cingular suggested she file for bankruptcy to pay the bill. From Yahoo!:

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 Yahoo! article gives some helpful tips for cellphone security, the most important of which is to call your provider immediately if you phone is lost or stolen. As for Wendy? They dropped the charges —only after she told her story to KPIX-TV in San Francisco. —MEGHANN MARCO

Ten Steps to Cell Phone Security [Yahoo! Finance]

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  1. FlyRyan says:

    I JUST read about this on Yahoo. This story is very disturbing. Many states have laws that protect aggainst this sort of thing (even if you are bound by the cell phone contract). The issue is that there usually isn’t a specific organization to carry out these protections. Also, telephone companies bring in lots of money for state governments which gives them alot of influence over industries that govern these compabies which, in turn, lets them make their own rules.

  2. mikyrok says:

    Shame on you Consumerist! Taking an ancient story and putting it up. This was resolved in October 2005 by CBS’s “On Your Side” segment.

    http://cbs5.com/30minutes/local_story_259184928.html

  3. scoobydoo says:

    There should be systems in place to protect against charges like this. If I run up out of the ordinary charges on my CC I get a call, and I can be pretty damn sure that if I start charging $26k when I normally don’t spend that much that they’ll block it till I call them.

    Cingular is insane, downright criminal that they’d let someone “call” this much without so much as a temp. hold on the account.

  4. cncpun says:

    It’s her own damn fault for not reporting it stolen before leaving. What she gave it to a friend to use when she was gone… they racked up teh charges knowing she could dispute it upon her return. I think some of the responsibility here lies with the customer and taking care of their own property.

  5. phypennwl says:

    @mikeyrock: I’m not sure why Consumerist shouldn’t put up ancient stories, as long as it’s not a repeat and it’s still relevant today.

  6. ptkdude says:

    @scoobydoo: There ARE systems in place to protect against charges like this… it’s called the telephone. ONE phone call to Cingular to report the phone stolen would have prevented this. The consumer failed to do what she should have done and she should pay the price. Wireless carriers have no way of knowing that your phone is stolen unless you tell them. The consumer has responsibility in this case.

    There are certainly many situations where a consumer does what they should do, or they do what most people would consider to be the “right thing” and companies screw up. This isn’t one of those cases. The consumer failed to notify the company that her phone was stolen. If her credit card had been stolen and she failed to report it she would absolutely be responsible for the charges.

  7. iMike says:

    What’s wrong with Consumerist these days? Maybe you should increase the publicity on your tip line or something?

  8. KRSMAV says:

    My wife had exactly the same thing happen to her. Someone hooked her Cingular phone out of her backpack. By the time she noticed, it had $2,500 in calls to Jamaica. Cingular stonewalled it through several escalations, and the amount of money was too small to interest any TV station, so she had to pay the full amount.

  9. joeblevins says:

    This is another example of a stupid consumer making a HUGE mistake and wanting to be let off the hook. This chick screwed up big time, yet it is the evil company that screwed her?

    We need a little more accountability for our ‘victims’.

    Yes the charge is too big, but she owes a duty to inform her cell phone company she lost her phone.

  10. ptkdude says:

    @KRSMAV: I can understand a consumer being pissed about this. Here’s how to prevent it:

    Call your wireless carrier and have them block international calling. It won’t cost you anything.

  11. wodnerduck says:

    This is one reason why I put a PIN code on my phone and SIM. This way, if somebody turns off my mobile phone they cannot get into it without entering a code. I think this is a safe and secure thing to do and EVERYBODY should do it.

  12. jaewon223 says:

    “San Francisco resident Wendy Nguyen was even more 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.”

    The Consumerist article did not mention that Wendy Nguyen’s cell phone was unknowingly stolen before she left. She was did not know that it was stolen. There is no way that she can take blame for what happened here.

  13. mroach says:

    @joeblevins:

    I agree. Life 101: When something is stolen, you report it as soon as humanly possible. I can’t fathom having my phone or credit card stolen and proceeding to go on a trip without telling my provider/issuer and then expecting to be let off the hook for all fraudulent charges racked up while I was away. That’s downright irresponsible behavior.

    Now, tt would be nice to see carriers a bit more proactive in preventing fraud. If they did something as simple as calling the customer when their balance exceeded $1000 to let them know that they’re racking up a huge bill and suspending their account if they don’t answer the phone or can’t identify themselves. Letting the bill get to $26,000 is quite absurd.

  14. consumed says:

    How can someone not know their cell phone was missing for all that time? They are practically attached to most people these days. It’s one of those things you know you either do or don’t have before you leave the house. Don’t people have a mental checklist: wallet, purse, keys, cell phone? I guess if you’re like my parents, whose cell phone remains in their car and turned off most of the time, it doesn’t matter.

  15. eldergias says:

    @ptkdude: “If her credit card had been stolen and she failed to report it she would absolutely be responsible for the charges.”

    http://consumerist.com/consumer/debit-cards/debit-card-sto

    “Federal law limits your liability to $50 if your credit card is stolen”

    Care to revise your position on if she should be liable?

  16. sam says:

    Don’t people have a mental checklist: wallet, purse, keys, cell phone?

    That really depends, doesn’t it? If I’m going overseas (which I do a lot for work) I take a work supplied cellphone, instead of my personal phone. If someone stole my phone while I was gone, I’d probably not figure it out until I got back.

  17. mikesfree says:

    If you dont like the terms of a contract… Why did you sign up with the company? Contracts are written agreements between two groups to ensure terms are clear and understandable to every party. You want to keep customers, but the $26,000 wasnt free to cingular. That is like waiving the equivalent of 10 to 15 years of service for most customers.

  18. Ryan Duff says:

    @mikeyrock: It was posted because of the Yahoo! Finance article posted on April 23, 2007. They just used Wendy as an example in the Yahoo! Finance article. No harm, no foul.

  19. @dougm: Maybe she never intended to take it with her on vacation. She figures she left it in a drawer or the car or something and doesn’t realize it’s not there until she gets back.

    @mroach: Why would they care about fraud if they get paid anyway?

    @wodnerduck: That’s awesome. How do you do that?

  20. ScramDiggyBooBoo says:

    God DAMN!! 26 Grand for a cell phone bill!! Was she on vacation for YEARS!! I agree with some of the posts above. You should be liable up to a point, but not 26 grand. I am still in shock at how you could rack up a bill like that. I just switched from Cingular for shady crap just like this. You should email the CEO or Executive Customer Service and ask them if they are really going to ruin someones life by making them declare bankruptcy because someone stole the phone. I mean c’mon. Say i am at home and i get robbed of everything i own and they get my phone that was charging as well. I am supposed to be like, well someone just stole everything i own, call the police? Hell no, call Cingular and tell them the phone was stolen so you dont get billed for it? I dont think so.

  21. @mikesfree: They write those things to ensure that no one reads them all the way through. It isn’t that people don’t like the contract terms it’s that they don’t know them.

    Contracts, disclosures, etc. are usually long and/or confusing and almost always have at least one section that is in all caps.

  22. Scuba Steve says:

    Screw robbing a house, just go in and use their phone.

  23. shdwsclan says:

    Cellphone companies rip you off…..bad.

    You have to pay a premium price for something that cost about nothing, seriously, you should see what it really costs for data even with company upkeep factored in.

    And then there is the POOR customer service and lousy sales reps that dont know any technical specifications about the phones……

    Wow, if there was regulation…god forbid, cellphone companies would have to restructure their services….and make them better…

    Think about it, if cellphone plans were cheap, everybody would have a cell phone, just look at japan….

    Its called a loss leader sprint, cingular, verizon and tmobile…..and us cellular…
    You loose a little in the short run, but you gain a lot in the long run. Well, this may not be for the TDMA providers, since more customers means more outages….

  24. tunelessnail says:

    I’m not trying to defend the cell phone company.. they deserve to eat at least some of the cost of the bill. I just have one question. If the customer was going out of the country, why didn’t she contact her carrier to see what options she had for her cell phone. Most carriers offer an option to get discounted rates to use the phone overseas, or an option to suspend service (thereby making the phone not usable) while you’re gone. Some of them even wiave the monthly cost of service while you’re gone. One call before the customer left may have been able to prevent all of this.

  25. wnguyen says:

    Comments from the person herself…

    1. The phone was stolen 6 hours prior to me getting on a plane, and I was unaware of the phone having been stolen. If I was aware, I would have reported it stolen before boarding. The reason why I didn’t take my cell phone with me was b/c I was leaving for a 3 week vacation to Vietnam, where I knew my phone would not be usable b/c it is not a tri-band and secondly b/c it’s Vietnam. It was obviously stolen and was not make friends making phone calls. The SIM card was replicated and calls were made every hour on the hour all throughout Latin America.

    2. I liken the situation to someone stealing your car and crashing it into a home. If the car was or was not stolen with your knowledge, should you be held accountable for the damage caused by a criminal?

    3. I also raised the issue of why credit card companies do not monitor your account like credit card companies and shut off the account in when unusual behavior occurs. The answer is simple. They don’t b/c they currently profit under the system. It is all too easy to bully consumers into paying for a $50-200 bill that they didn’t create. In fact, the process is all ironed out and the customer reps have it down to a tee. After reporting the phone stolen, the Cingular rep immediately sent me to the accounts management rep so I could set up a monthly pay-back plan not understanding the magnitude of my case. After having spoken to programmers at cell phone companies, I’ve found out that these systems are not difficult to implement and requires several lines of code.

    4. The larger implication of this story is that the big 4-5 cell phone carriers have formed an oligopoly where they are able to set unreasonable terms that do not give consumers basic rights. One user had commented that I should have read the contract and terms, but what difference does it make if every single carrier enforces the same set of lame terms? There isn’t enough competition in the market to enable choice. On top of that, the investigation revealed California politicians were receiving significant campaign contributions to keep the industry unregulated. Go figure.