Cellular Phone Dealers Sue Firms

Ten Orange County cellular telephone dealers have filed a $6-million lawsuit charging Leo’s Stereo and Pak-Cell Inc. with predatory pricing and other illegal practices in the sale of mobile phones.

The suit, filed last week in Orange County Superior Court, alleges that Leo’s and Pak-Cell are selling the phones at a loss but making the money back by requiring buyers to sign up for cellular service.

Dealers get hefty commissions from the cellular service providers for signing up new customers, but the “bundling” of phone sales with service orders has been ruled illegal by the California Public Utilities Commission.