Expert: Timmy Chou - 10/6/2008

Question
Hello Mr. Chou,

I am disputing early termination fees from T-Mobile.  I originally had one line with T-Mobile for four years. I signed up for a family plan and added two lines in 2006. I  wanted a one year plan because we knew that there would be a chance of us moving overseas in one year.   I told the sales person this and he and the store manager assured me that if I moved out of the coverage area, they would waive the fees.  I asked several other stores and also called T-Mobile myself and got the same answer. i decided to go with the three year plan because it was a lower monthly fee and I was not certain that I would be moving. I did this on the recommendation of the sales people and that has turned out to be a big mistake.

We did move in July 2007.  I contacted T-Mobile before we left and they waived the fees with the understanding that I would fax documentation proving that I was living in Lebanon.  I originally faxed the information in August 2007. In November my brother, who was living in my house here, got a notice saying that I owed $700.  He called T-Mobile and got a second agent number to fax the proof to.  I did so with a letter stating what had happened and my email address, asking them to contact me if I needed to do anything else.

I called T-Mobile myself in April, just to make sure everything was taken care of.  I was given the number of a collection company although they did not tell me that my bill was in collections.  I called back to T-Mobile and spoke to a manager who told me to again fax documentation to a new number (as it turns out it was to the collection agency)  I faxed 20 pages including, copies of our passports, tickets, school letters with our overseas address, and medical reports - anything that I had in English.

I moved back to Massachusetts in August and after contacting T-Mobile repeatedly, I found out that the information I sent was not sufficient.  They do agree that they should not have sent my account to collections, but they say that I have to deal with the collection company.  A representative and a supervisor at T-Mobile told me to fax a lease agreement to the collection department and that should take care of it.

I faxed an official translation of my lease agreement to the collection company on October 1st.  They have said that they received it and are reviewing it. I don't know what the process involves now but they say they will contact me.

What would your advice as a mediator be in this situation?  I have spent hours on the phone and compiling documentation and I think that I am not much further along than when I started.

Thank you very much for your time,
Shannon

Answer
Thank you for your question!

As I always mention, Mediators act as neutral third parties to disputes and never "get involved" in judging the merits of conflict, but merely use special techniques to help the parties decide how to negotiate their own settlement.

The case you describe here is far too typical.  I am not a lawyer and cannot mediate this with you alone but I can respond to your question from my business consulting experience.

Note that this issue may have legal ramifications and you may wish to consult an attorney.

IMO you are entirely in the right, but as you have seen, no one cares.  You appear to have complete documentation of your position, but again, no one cares.

You have to remember that T-Mobile (and many other large bureaucracies from hospitals to utilities) are just large machines with small people just doing their best to clear their desks and make their quotas.  Its not personal.

Nevertheless, they are in the wrong, but their are no incentives in the system for anyone to do anything but continue to try and get money from you.  This is especially true for collectors, who are just trying to whine you into a payment. So don't bother with T-Mobile anymore.  If it has been assigned to collections it is off the radar for T-Mobile and they cannot deal with you since they have given the rights to someone else.

Here's your next step.  A final certified letter to the collector saying:

1. That you dispute this collection.  Cite your reasons.  Make sure you mention that T-Mobile reps agree with your position.
2. That the company cease and desist from collection contacts and calls.
3. That the company company comply fully with the provisions of the Fair Debt Collection Practices Act (which forbids calls and notes on your credit file for disputed claims)
4. That any notation or entry on your credit file will not be acceptable and will generate a complaint to your state's consumer protection office.
5. That you will grant the collector fifteen business days to either produce evidence refuting your position, or you will consider the matter closed and any further attempt to harass or intimidate you will not be tolerated.

Mail this certified, copy your state's consumer protection office, your attorney (if you have one), and the Federal Trade Commission.  Be sure to have the copied groups listed at the end of your letter so the collection agency knows you are serious about your threats.

If anyone calls you, do not engage them on the subject of the debt, but ask them for their name, the name of their supervisor, and then ask them if they are aware that you have disputed the debt and that they have just violated the FDCPA by contacting you. This is the only thing to talk about with them, if you want to talk at all.

You should be able to get rid of this problem.  Be sure and double check your credit file to make sure you were not dinged.

If the company is convinced that: 1) you are not backing down; 2) you are going to raise hell and tell everyone; and 3) it will likely cost more money to deal with you than it would to settle with you; than they will make a business decision and forget about you.

Don't be surprised if you get contacted later by another collection agency.  They often sell of their "problem" accounts to each other.  If this happens you write again to all the above and report that your account was "kited" from Company A to Company B in violation of the FDCPA.  This may just hang out there for a long time, but as long as it does not appear on your credit file you cannot be harmed.

These are some ideas.  Feel free to follow up with additional questions.

For your information, the pros and cons of the types of dispute resolution methods follows.

GOOD LUCK!

Arbitration, Mediation, and Litigation

Arbitration: the referral of a dispute to one or more impartial persons for final and binding determination outside of the judicial system

Benefits of Arbitration:

   Confidential, no public record
   Limited exchange of documentation, information
   Quick, don't have to wait for a court date
   Arbitrators have expertise in the subject matter and are trained in conflict resolution
   Cheaper than litigation
   Preserves business relationships

Negatives of Arbitration

   It's a compromise, no %100 winner
   Complex arbitration can be costly
   If not satisfied, may litigate the arbitration procedure
   Poor results with an unskilled arbitrator
   Both parties must agree to cooperate in the process

Mediation: the process by which parties submit their dispute to a neutral third party (the mediator) who works with the parties to reach a settlement of their dispute.

Benefits of Mediation:

   Neutral mediator can objectively suggest alternatives not considered before
   Parties are directly engaged in negotiating the settlement
   Can be quicker than litigation
   Less costly than litigation
   Preserves business relationships
   85% of American Arbitration Association cases mediated find successful solutions

Negatives of Mediation

   may not reach a binding decision
   unskilled mediator

Litigation: using the judicial system to resolve disputes

Benefits of litigation:

   a clear winner and loser
   uses a prescribed set of procedures
   more predictable outcomes
   is final

Negatives of Litigation:

   waiting for court dates can do more harm
   usually more expensive than mediation and arbitration
   part of the public record