Security Claims Of Wireless Phone Carrier Questioned

Attorney General Spitzer today announced an agreement with a national wireless telecommunications company to settle concerns regarding its privacy and security claims.

Omnipoint Communications, Inc., which was recently purchased by VoiceStream Wireless, settled allegations of false advertising for claims that its Global System for Mobil Communications (GSM) provided "complete and total privacy." Omnipoint also settled charges that it failed to clearly disclose to customers that its network was not available in certain areas.

"My office has been very active in ensuring that wireless telecommunications carriers live up to their claims and offers," Spitzer said. "Today's settlement will encourage open and fair competition among wireless carriers through truthful marketing campaigns."

This marks the fourth time Spitzer has secured a settlement with a wireless phone company over misleading advertisements. The Attorney General's Office recently announced agreements with Bell Atlantic Mobile, Sprint PCS, and Cellular One. Due to the work of his office, these companies all agreed to, among other things, modify their marketing claims to clarify restrictions and conditions on wireless services, as well as any associated fees.

In 1996, when Omnipoint first introduced to consumers in New York State its personal communications services using the GSM system, it touted the system's high level of security. While calls made over the GSM system were not susceptible to eavesdropping or interceptable, it failed to disclose that calls made or received from a non-GSM phone were not fully encrypted after they left the system and therefore, would not be completely secure.

Spitzer's office also investigated whether, at the time it began its promotion, Omnipoint failed to clearly disclose that service was not available in all areas where many customers would expect to use it. Users quickly discovered that they could place and receive wireless calls within metropolitan New York City, but could not access the network from many parts of Long Island and Westchester County.

In settling the charges, Omnipoint agreed to: clarify claims regarding the privacy or security of calls made to or from its GSM system and non-GSM systems; clearly disclose all limitations and conditions of an advertised offer; and modify assertions about the contractual obligation and relationship between the company and its customer.

Omnipoint also agreed to pay $35,000 to cover the costs of the investigation. The company did not admit any wrongdoing.

Individuals with complaints about their wireless phone service are encouraged to contact the Attorney General's consumer help line at (800) 771-7755.

This case was handled by Assistant Attorney General Jane M. Azia of the Consumer Frauds and Protection Bureau.