Asurion’s Cell Phone Insurance for T-Mobile Customers
The complaint, which was originally filed in 2006, alleged that Asurion misleadingly informed T-Mobile customers that cell phone insurance operated like any other insurance policy when such claims were actually not true because the word “deductible” in the policy was used in an atypical way. Specifically, plaintiffs claimed that, in the insurance industry, the “deductible” is the amount deducted from the amount of the loss incurred (i.e., if the loss is less than the deductible, the consumer will not be able to recover from the insurance company) but when used by Asurion, the “deductible” is a processing fee charged to consumers who file a claim for a replacement cell phone. In addition, the complaint alleged that the insurance policy did not adequately disclose that lost phones are routinely replaced with refurbished ones that are worth less than the lost phones.
According to the proposed settlement terms, class members may each receive a pro rata share (not to exceed $124) of the $4.2 million settlement fund after other expenses (including attorney fees, costs approved by the court, and notice expenses) are paid. The settlement agreement states that the companies agreed to enhance certain disclosures, including that cell phones may be replaced with refurbished or different equipment.
A final fairness hearing is scheduled for February 15, 2016. (Cole et al v. Asurion Corporation, T-Mobile USA, Inc., et al, Case No. 06-cv-6649, C. D. CA.)