Coming to terms hard at Verizon

For years, credit card issuers have gotten away with withholding contracts from customers until they actually have the plastic in their hands -- a practice that denies many people a fair chance to look under the hood for onerous terms and conditions.

Now it looks like Verizon has adopted the same technique.

Torrance resident Sandy Lough thought she was being offered a straightforward deal when a Verizon salesman came to her home recently with an offer to sign up for the company’s state-of-the-art FiOS broadband service at a special introductory price.

Lough, 66, agreed to a bundled package of phone and Internet service, and an installer arrived at her home last week to hook up the system. Some glitches ensued, but that’s not unusual when companies introduce technologies.

What really struck Lough was the discovery that to receive the promised discount for her bundled plan, she’d have to go online and agree to a 2,000-word “bundle service agreement” and a 7,000-word terms of service for Internet access.

This was the first time she was being presented with the full contract for her new FiOS setup, and the service had already been installed and activated.

“It was voluminous,” Lough recalled. “It was so long that I wasn’t able to read or comprehend it.”

Some aspects of the bundle service agreement are included in the order form customers fill out before FiOS installation begins. For example, there’s fleeting mention of an “up to $199 early termination charge.”

But without reading the full contract, you wouldn’t know that the termination fee applies even if you cancel just one part of your package -- only TV, say -- without agreeing to a whole new package.

You also wouldn’t know that you’re waiving the right to sue Verizon in court and are instead agreeing to settle any disputes via arbitration.

And you wouldn’t know that you’re agreeing to be subject to Virginia state law for the purposes of the contract, which the agreement neglects to mention is one of the few states that doesn’t allow consumers to file class-action lawsuits.

Although the online terms of service can be readily accessed on Verizon’s website, the bundle service agreement can be viewed only after a FiOS customer receives a user name and password from the company.

These are provided only after the service has been switched on -- in other words, after you’re already a customer.

Cliff Lee, a Verizon spokesman, said new customers had 15 days in which to cancel without being subject to a termination fee. He also said the company’s sales reps reviewed “the key parts” of the contract before installation.

As for why the full contract is withheld until after FiOS has been installed in a person’s home, Lee said only that “this is the way we’ve found that works.”

Lough still hasn’t agreed to the terms -- she has 30 days before Verizon’s standard (and more expensive) FiOS rates kick in. But she assumes she’ll finally just click on the “I agree” button. Her house is already wired for FiOS, after all, and she can’t imagine going through all the rigmarole of getting her old services reinstalled.

“I’m just not up for going through this again,” Lough said. “I guess I bought a pig in a poke.”

Not necessarily. Many users say FiOS works great and is competitive with rival cable and satellite offerings.

On the other hand, perhaps Lough would have reconsidered had she known in advance that, according to the online terms of service, Verizon “reserves the right to change any of the features, content or applications of the service at any time with or without notice to you.”

Or perhaps she would have raised an eyebrow at the provision stipulating that her Internet service can be cut off if she engages “in any conduct harmful to the Verizon network, the Internet generally or other Internet users.”

Credit card companies have long made it a standard practice to withhold final contracts from customers until they sign up for new plastic. Ken Clayton, managing director of card policy for the American Bankers Assn., said this didn’t place consumers at a disadvantage.

“You apply for the card, you get the card and then you can decide you don’t want the card,” he said. “The consumer has a chance to walk away any time he wants.”

That may be true. But withholding the contract prevents consumers from accurately comparing card terms before submitting applications. It also increases the likelihood that the consumer will accept the card, seeing as he or she already has the plastic in hand.

Verizon similarly prevents consumers from making informed choices before agreeing to have FiOS installed. The arbitration clause of the bundle service agreement, for example, may take many people by surprise.

There’s nothing about arbitration in the general terms and conditions on Verizon’s main Web page.

The California Supreme Court has ruled that some arbitration clauses are unenforceable because they’re unfair or strip consumers of legal rights.

But Verizon seems to have anticipated this possibility by also stipulating that customers agree to be subject to Virginia law, which doesn’t accept class-action lawsuits at the state level. Also, Virginia’s a long way to travel if you live in Torrance and have a beef with the company.

Such suits are frequently the only cost-effective way that individuals can sue companies for relatively small amounts of money.

“I wouldn’t say Virginia is consumer-unfriendly,” said George Rutherglen, a law professor at the University of Virginia. “Rather, Virginia strives to be business-friendly.”

Verizon’s Lee said the company saw no problem with including both an arbitration clause and the Virginia law provision.

“These are appropriate and reasonable terms,” he said.

Maybe for Verizon. Not for the rest of us.

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