Sprint: The Provider That Won't Go Away
It was an Aug. 2 letter threatening to report me to collection agencies that pushed me over the edge. After seven years of being a mostly satisfied Sprint Nextel (S) customer, two months earlier I had switched to Verizon Wireless. Since Sprint merged with Nextel in 2005, I had begun to notice a decline in network coverage. I got fed up with an increasing number of dropped calls and busy signals, and when someone began using my phone number illegally in May, I decided it was time to break up with Sprint.
But Sprint refuses to let me go. Since changing service providers, I have tried on three occasions to cancel my service. Over six weeks, I have spent about 10 hours on the phone with Sprint customer service representatives, repeatedly explaining my predicament. And yet Sprint refuses to cancel my contract and continues to charge me for service. "It seems they never have these glitches on the front end when they sign you up," says Russ Haven, legislative counsel for the New York Public Interest Research Group.
As a journalist covering technology, I had long known of service complaints against Sprint, but now I have experienced many of these frustrations firsthand. My tale reflects the troubles engulfing Sprint, and raises concerns over how soon the wireless carrier may emerge from its slump. In the second quarter, Sprint reported a 95% dive in profit as sales growth slowed and costs increased. One of the few glimmers of hope: Sprint attracted 373,000 new customers in the period, reversing three quarters of losses—though it continues to lag rivals AT&T (T) and Verizon Wireless, which added 1.5 million customers and 1.3 million customers, respectively.
Much of the improvement Sprint Nextel did experience emanated from a reduction in what the industry calls churn, or the average percentage of customers who disconnect service each month. On the conference call discussing results, Sprint Nextel boasted about its ability to keep customers longer. Sprint's churn decreased to just over 2%, compared with 2.1% a year ago and 2.3% in the preceding quarter.
Good news, perhaps. But throughout my ordeal, I couldn't help but wonder how many subscribers were in my predicament? How much of the improvement in churn—a closely watched performance measurement—was the result of deliberate delaying by Sprint?
Other companies have gotten into hot water for making it hard for customers to cancel service. On July 11, Time Warner's (TWX) America Online agreed to pay $3 million as part of a settlement with 48 states and the District of Columbia to resolve complaints that the online service provider made it extraordinarily difficult to cancel service. AOL customer service reps were paid bonuses of up to $3,000 if they convinced customers not to terminate the service. The agreement requires AOL to give refunds to consumers who can show that AOL billed them after a cancellation attempt. Connecticut Attorney General Richard Blumenthal called AOL's practices "outlandish and underhanded."
Jerry Adriano, Sprint's vice-president of customer experience, denies that the company is dragging its feet in processing cancellations. But he said the process of moving Sprint customers to the Nextel billing system hindered its ability to "perform certain transactions" for a short period. When asked if Sprint uses financial incentives to encourage service reps to keep customers on the books, Adriano said, "All companies have retention departments." And while I uncovered no indication Sprint is systematically delaying cancellations, I became all too familiar with a maddening bureaucracy that made it impossible for me to exit Sprint's subscriber rolls.
Adriano said little to instill confidence in Sprint's attention to customer complaints. When I explained my situation, he did not take responsibility. Nor did he apologize for what I consider repeated mistakes and false promises. When I expressed shock at his lack of sympathy, Adriano replied, "It is not what we want to have happened."
What "happened" started in May, when someone illegally began using my phone number in a process known as cloning. To Sprint's credit, it caught the fraud and refunded my account for $900 in bogus calls. But Sprint still charged me for service during the one-month period it was hijacked, and useless to me. In early June, I asked for a refund but the request was denied. I paid the bill and on June 11 signed up with Verizon Wireless.
I thought changing providers automatically ended your service. But then in late June, I received a bill from Sprint for $54.36 covering the period of May 25 to June 25—a second month I wasn't using the service. So I called on July 2 and canceled again. I even said they could bill me for service through June 11. Again my request was denied, and Sprint debited my account on July 19 for the full $54.36. I also asked for a letter confirming my cancellation. I never got it but figured that a second call would do the job.
How foolish! In late July I received yet another bill, this time for a third full month of service. On July 31, I called again, determined to end the madness. I was passed from one rep to another. Both were friendly, but neither was able to solve the problem. The second, an account service manager named Mark, blamed system glitches. "It should be canceled," he said. "It makes no sense." The account should have been canceled automatically when I switched providers, he said. But he couldn't do it manually because Sprint's software kept locking him out and he wasn't authorized to override the software. He promised to refer the snafu to a supervisor and to cancel the most recent bill, for $54.17.
Passing the Buck
To ensure I wouldn't be billed again, I also tried to end the automatic bill pay service. Mark said the system wouldn't let him do that either but that he would send me over to finance. And so began another frustrating runaround from a finance rep who argued for 10 minutes that he couldn't cancel bill pay until I paid my outstanding balance. This is the same balance Mark assured me was at zero a few minutes earlier.
I made little headway other than receiving yet another promise I would receive a letter confirming my account cancellation. I never received that letter, but I did get the Aug. 2 written threat to get a collection agency involved. Even after I convinced my bank, Chase (JPM), to reverse the June debit, Sprint debited my account for the July payment. I called Chase to contest the charge. But Jerry, a supervisor in Chase's customer claim department, advised me to pay the bill and try to get the money back later, rather than risking a black mark on my credit report. "[Sprint] usually has billing issues," Jerry told me. "I've run across a number of customers who've had the same problem."
So have I. Seth Buncher, a 37-year-old video editor who lives in New York, inadvertently overpaid his bill for a year. It took him six months and some 20 phone calls to get the $1,400 back. "It was one of the most frustrating experiences I've ever had," Buncher says. "The bureaucracy and the hold times were staggering. I loathe that company."
Sadly for Sprint and its shareholders, so do many dissatisfied customers. Adriano promised to help me solve my problems once and for all. But that's cold comfort to subscribers who can't air their grievances in print.