Cell Phone Contracts And The Servicemembers Civil Relief Act

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Cell Phone Contracts And The Servicemembers Civil Relief Act

Revised just a few years ago, the SCRA provides protections for active duty servicemembers, their families and dependents in certain civil situations. Failure to comply with this law can result in serious penalties and fines. Some of these protections apply directly to cell phone service providers, meaning that it is crucial for these companies to be fully aware of the provisions outlined by the SCRA. Performing a batch active duty military search is a fast and convenient way for cell phone service providers to identify customers who are entitled to protection under this act.

Who is protected?
The Servicemembers Civil Relief Act only applies to active duty servicemembers, or in some situations their families and dependents. In this case a dependent is someone for whom the servicemember is paying 50 percent or more of living expenses. A reliable military status report should identify not only whether a person has active duty status, but also whether they are the family or dependent of someone who does.

Additionally, in the case of cell phone service providers, protections generally only apply to servicemembers who meet the following conditions:

  1. Have received orders to deploy outside of the continental United States for not less than 90 days, or have received a permanent “change of duty” station within the United States.
  2. Have received the above orders after signing the cell phone contract.
  3. Can reasonably explain why their orders will materially affect their ability to satisfy the contract or use the service.

What protections are offered?
A servicemember with active military status and who meets the above conditions must be able to terminate his or her contract without paying early termination fees. The servicemember is also entitled to ask for a suspension of the contract for the duration of the deployment. In this latter scenario, the cell phone service provider may not charge a penalty, nor can it require an extension of the contract equal to the period of the suspension.

In practical terms, the SCRA basically gives servicemembers wide ranging freedom to get out of cell phone contracts when they are repositioned. However, they do have to provide a copy of their orders and state why these orders materially affect their ability to comply with the contract. Without a copy of the orders, cell phone service providers may be in a position in which they are not obligated to comply with the servicemembers’ request for termination or suspension of the contract.

What are the penalties for non-compliance?
Penalties for non-compliance with the Servicemembers Civil Relief Act can be moderate or severe, depending on the judge’s ruling. There are two situations in which a cell phone service provider may find itself on the wrong side of the SCRA.

Under Sec. 597a, a party aggrieved by a violation of the SCRA may file a civil action in order to receive, (1) equitable or declaratory relief with respect to the violation and (2) all other appropriate relief, including monetary damages. In other words, the money paid by the servicemember under the contract and money to cover any damages caused by the cell phone service provider’s non-compliance with the SCRA.

Under Sec. 597, the Attorney General may commence a civil action in any appropriate district court of the U.S. This situation is relatively rare, as the Attorney General can only do this in a case in which the defendant appears to have engaged in a pattern of SCRA violations, or who’s violation raises an issue “of significant public importance.” In this case, both of the above penalties apply, and a civil penalty may apply to vindicate the public interest. This penalty may be as high as $55,000 for the first violation and as high as $110,000 for subsequent violations.

Considering the high potential penalties faced by cell phone service providers who do not comply with the act, it is crucial that service providers utilize a batch service to check military status.

Attorney Roy Kaufmann serves as the Director of the Servicemembers Civil Relief Act Centralized Verification Service, located in Washington, D.C. As a recognized authority on the Servicemembers Civil Relief Act, Mr. Kaufmann has published hundreds of articles and hosted many webinars. His teachings help law firms and businesses to remain compliant with the SCRA rules and regulations so as to avoid costly fines.

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