In Study Abroad, Dispute Over Roaming

October 3, 2008

A group of six students and parents have sued a cell phone provider that is promoted or publicized by a number of study abroad programs.

The plaintiffs, who are pursuing a class action case, allege unfair or deceptive billing practices on the part of Seattle-based PicCell Wireless, which they argue overcharged customers for roaming fees and billed a premium above established currency exchange rates, without clear or adequate disclosure of either practice.

In addition to suing under the Washington Consumer Protection Act, the complaint alleges that PicCell violated the federal Fair Credit Billing Act by requiring that customers waive disputes not brought within 30 days, and for penalizing customers for pursuing disputes through their credit card companies.

On that note, the terms and conditions of PicCell’s cellular service agreement state, “All initial disputes must be done through PicCell, and not the credit card company or bank. For every chargeback, retrieval, or credit card dispute or request made, PicCell is required to do an in-depth analysis and account review which carries a $30 Account Review Fee. This penalty is due regardless of whether the chargeback, retrieval or credit card request is deemed justifiable by the appropriate credit card company or bank handling the case. The customer must pay all charges on time until the dispute is resolved.”

PicCell markets itself as an American company renting and selling cellular phone products for short-term use abroad, and targets “world travelers” and study abroad participants specifically.

“Several schools and study abroad programs would include marketing materials from PicCell in their packets for students, would in some cases recommend PicCell as a provider of services, or would facilitate students contracting with PicCell,” said Adam Berger, a lawyer with the Seattle-based firm Schroeter Goldmark & Bender, which filed the lawsuit in a federal district court in Seattle on September 25.

"The people we have spoken to who have had concerns and complaints, their bills have been in the hundreds of dollars typically. We have at least one instance in which the bill was over $1,000," said Berger.

"I helped start PicCell in 2002 after my own study abroad experience in Italy where it was nearly impossible to make sense of the costs or options for calling back to the States," Brandon Ferrante, CEO of PicCell, said via e-mail.

"The case has just started and the court has not ruled on anything. They have also launched an aggressive campaign to publicize the suit and damage PicCell’s hard-earned reputation," Ferrante said. "We are vigorously contesting the allegations of wrongdoing."

He said that the company has added a number of features in the past year to educate customers about roaming charges, and described the company's 3 percent currency conversion fee as on par with that of credit card companies and banks.

Christine Negroni, a parent who is among the plaintiffs, said that her daughter felt she was steered toward PicCell by IES, her program provider. IES requires that students have a cell phone for safety reasons, and included marketing materials for PicCell in its pre-departure packet.

"When she got this material, she just acted on it," said Negroni. "The student will rely on the recommendation of the school, and therefore, the school has to be very careful in making recommendations."

Matthew Rader, IES's dean of students, said they do not endorse or recommend any particular phone company (and in fact, the frequently asked questions section of the Web site spells that out). "But one thing we have done in the past is offer marketing materials for PicCell and Cellhire" -- a company offering similar services -- "because lots of people call our offices and have questions."

Rader said IES had no business relationship with PicCell or Cellhire. He added that IES stopped disseminating the marketing materials about six or seven months ago. "We wanted to be sure that all students understood they had a full range of choice."

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