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Can I Sue My Phone Company?

Yes, but it's likely that you're limited to bringing your lawsuit in small claims court. If your dispute is for more than what the small claims court can award, your only option may be to pursue an out-of-court process called arbitration.

Lawsuits against phone companies are hard to win. Your service contract limits your provider's liability, contains disclaimers and waivers, imposes time constraints in which you must bring any claim, and makes you jump through various procedural hoops.

If you do want to bring legal action against your phone company, especially an arbitration, you may benefit from getting legal advice from an experienced consumer protection lawyer or an arbitration lawyer.

Most American Adults Own a Cell Phone

The wireless cell phone industry is big business in the U.S. In 2019, the wireless cell phone industry made $187.36 billion. According to the Pew Research Center, 97% of U.S. adults own a cell phone. Of those, 85% are smartphones (e.g., an iPhone, etc.).

Cell phone service has improved dramatically since the first cell phone tower went up in Japan in the late 1970s. When first brought to the U.S. in the early 1980s, service was spotty at best, and calls were often dropped. Only the rich could afford to buy a phone and pay for coverage. And the phones themselves were huge — they were called brick phones.

Now, a phone fits in your pocket. Service is available almost anywhere you go. And with the growth of 5G, you can not only make calls but also stream movies and play games over a wireless network. We have grown to expect good, consistent service and coverage.

You May Get Into a Dispute With Your Carrier

But even today, problems arise. You may not be getting good coverage. Maybe you're dealing with dropped phone calls. Your provider might make billing errors. Charge the wrong credit card. Maybe you pay for “unlimited data" and your provider engages in data throttling (meaning they slow down speeds dramatically after you reach a certain limit on data, effectively cutting you off).

Most of these problems are easily and quickly resolved. However, a dropped call at the wrong time — like when you are trying to dial 911 — could mean life or death.

If you get into a dispute with your carrier, you have options. That might include suing them. But before we get there, let's start at the top.

You Are Bound by Your Service Contract

When you signed up for cell phone service, you agreed to your provider's terms of service. Those terms formed a contract. You are bound by that contract. And each provider's service contract includes terms that set out how to resolve any disputes you may get into.

FindLaw looked at the contracts of the four (now more like three) major U.S. cell phone providers to see whether there were similarities in how disputes are supposed to be resolved:

Dispute Resolution Steps

FindLaw found that they all have the same general dispute resolution process. Make sure to look at the specific terms of your own contract. And be aware that those terms change from time to time, so you will want to read them carefully.

Step One: Call Customer Service

So you get into a dispute with your provider. Your initial reaction may be to run to the courthouse to file a lawsuit. But resist that urge. You should first try to work it out through your provider's customer service department. You can find the number on your provider's website.

They may have made a simple mistake. Give them a chance to fix it. Even if it's a bigger issue, they may be willing to work with you. Who knows? You may be happy with their solution.

Step Two: Informal Dispute Resolution

But maybe you're not. The next step is to pull out your service agreement. We've provided the links above. Look at the language under dispute resolution. You will see an outline of things to do before you can file legal action.

That outline typically starts with notifying the company in writing about the details of your problem. You then give the company a specified amount of time to get back to you. They will look into your claim and may propose a solution that may satisfy you.

Be aware that your contract may require you to give that notice within a particular amount of time. Make sure you do so. If you don't, you may not be able to take legal action.

Step Three: Formal Dispute Resolution

Suppose you are not happy with what your provider is willing to do for you. You can then take legal action. But your options are limited by your service agreement.

Legal Action Option One: Small Claims Court

Your first option is to sue your provider in small claims court. Small claims courts provide a relatively inexpensive way of resolving all sorts of legal matters, including breach of contract disputes and fights between landlords and tenants. You can handle many small claims disputes without a lawyer (and some states won't let you use one in small claims court).

Small claims courts are limited in the size of the dispute that they can handle under state law. Depending on your state, the amount could be as little as $2,500 (Rhode Island and Kentucky) and as much as $25,000 (Delaware and Tennessee).

If your dispute is pretty straightforward (for example, a billing error) and below the limit amount, small claims court may work out just fine for you. Be aware that if your dispute is for more than the state limit, you won't be able to recover the rest of the amount you are owed if you go to small claims court. Also note that according to the language of most service contracts, you do not have the right to have a jury hear your case.

Legal Action Option Two: Arbitration

Your second option is to bring what is called an arbitration. Arbitration is a dispute resolution process that takes place out of court. You and your cell phone provider hire a neutral third party, called an “arbitrator," who reviews written submissions, hears evidence, and solves the dispute for you. You do not get to appeal the arbitrator's decision. Their decision is binding.

There are pros and cons. Some of the pros are:

  • Arbitration may cost less than a court case
  • You may be able to get a faster result
  • The arbitration process may be less complicated than a court case
  • Arbitrations are generally not public

Some of the cons are:

  • Arbitration is getting more expensive (and probably costs more than a small claims court case)
  • Your cell phone provider will almost certainly be represented by a lawyer, so you will want one too
  • Arbitrators usually come from a small group of people and may do a lot of business with your service provider (leading to possible bias)
  • Because you can't appeal, you may get stuck with a decision that you think is unfair

The arbitration clauses in the companies' service agreements differ. A couple of them specify in detail how the arbitration is supposed to proceed, a couple of others say you follow a federal statute, the Federal Arbitration Act, that describes the process.

Some lawyers like arbitration, others don't. Legal experts disagree. If you do decide to pursue arbitration, you should strongly consider consulting an attorney experienced in handling them.

Be Aware of the Fine Print

Whether you choose small claims court or are stuck with forced arbitration, you need to be aware of the fine print in your service contract. Your provider wrote it, so you probably won't be surprised to see that it goes to great lengths to protect the company and contains a lot of legalese.

If you dig into that legalese, you will see that the contract contains a lot of additional restrictions, waivers, and limitations. For example:

  • You are not able to group your claim with those of other people into what is called a class action lawsuit
  • You have to bring your claim within a certain time or you lose any right to recover
  • Your provider “disclaims" any warranties relating to the quality of service (which essentially means that they can give you bad service and you're stuck with it)

These are just a few of them. Again, you want to make sure you check the specific language of your contract to make sure what limitations apply in your situation.

Consider Getting Legal Advice

If you have a dispute with your cell phone service provider, try to work it out. A customer service agent may be able to help you. If that doesn't work, you need to look carefully at your service contract to see what your next steps are.

If you do end up taking legal action, your choices are small claims court or arbitration. A good consumer protection law firm can give you legal advice and help you understand your consumer rights so you can decide whether taking legal action makes sense for you.

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