Call Kurtis: Insurance Company Sent Me Two Defective Phones!

SACRAMENTO (CBS13) -- A Sacramento woman bought insurance for her new cell phone but just days later, it was stolen.  When the insurance company replaced it with two defective phones, she called Kurtis.

She insured her Droid X through a third party company, Mobile Device Protection Association.

But she says getting it replaced has been nothing but headaches.

Four days after buying her Droid X in December, Erin Roland-Spahr says it was stolen at this Sacramento nightclub.

"I was upset but I figured, well, thank goodness I have insurance to cover it," says Erin.

Erin filed a claim with her insurance company, Mobile Device Protection Association out of Florida.

After all, she paid $69.99 for a year's coverage.

The company's replacement phone didn't show up.

The insurer claimed FedEx damaged it, so they sent her a second one.

"Two days later, I started to notice there was something wrong with the screen," says Erin.

Erin shows us the problem every time she touches the screen.

"Like some kind of water spot," says Erin.

She called MDPA again, which had their supplier in Michigan exchange the phone, but Erin says the replacement phone had the same problem.

"So I called him and said, did you just send me the same phone back?" asked Erin.

She says she was told maybe she should demagnetize herself!

"Apparently he's suggesting I'm one of these oddities and it's me, and I'm demagnetizing the phone some how," says Erin.

Erin then found out MDPA cancelled her insurance because she maxed out her coverage.  

She complained to the Better Business Bureau and then the company offered her $250, which won't cover the cost of a new phone... $560.

"First of all, my phone was stolen from me so right there, I'm violated.  Then this company goes and violates me even more... it's just frustrating," says Erin.

We contacted Mobile Device Protection Association, which said in an email she has

"a $500 maximum liability which was exceeded."

After that, they canceled her insurance and gave her a pro-rated refund for the remaining months.

But Erin just wants a fully functional phone!

The general manager says "We regret any inconvenience caused this customer, but I can't recall a single situation in my 25 years running this company that involves one new $570 (phone) lost by FedEx and two more found to have a mysterious spot."

-- Lawrence Jordan, General Manager

He agreed to cut Erin a check to cover a new phone.

"I just want what I was promised when I paid them their money," says Erin.

Insurance is meant to make you whole if something goes wrong.

Erin doesn't think she was made whole once her phone was stolen.

One thing to consider with any warranty or insurance policy.... some say once a product is replaced or you've reached their maximum liability... the policy is void.

This company's policy does not say that.  Once we pointed it out, they said they plan to talk with their legal counsel about it.

Mobile Device Protection Association Statement:

Thanks for the email. In accord with our conversation we have this day forwarded customer Roland-Spahr a pre-paid, FedEx label to use for the return of the new, replacement Motorola Droid X now in her possession. Upon receipt of that phone here at our offices we will immediately send her a check for $319.99 which constitutes the difference between our $250 check (#14336) sent to her on 2/15/11 for any repairs necessary and the current Verizon.com published full retail price of another new Droid X.

As I mentioned in our recent telephone conversation, the Membership purchased by customer Roland-Spahr has a $500 maximum liability which was exceeded. After cancellation, a pro-rata Member Fee refund of $60.10 was forwarded to the Member on 1/25/11.

I have attached pages from our website and the website of the Cellular Retailer, detailing the coverage limits and how to obtain that information. Thanks for your assistance in resolving this matter. We regret any inconvenience caused this customer but I can't recall a single situation in my 25 years running this company that involves one new $570 lost by FedEx and two more found to have a mysterious "spot".  

Regards,

L.W. Jordan

General Manager

MDPA's Response About Their Terms and Conditions:

To access the Terms and Conditions of Membership, as any prospective customer could do, go to www.wirefly.com (the cellular retailer), then go to Customer Support and then Device Protection.  All pertinent questions are answered on this site.  Unfortunately, since Ms. Roland's membership has been refunded, she no longer has access to our site which shows the same information; however this information was printed out and FedEx'd to you.  Had Ms. Roland's membership not been cancelled and refunded, she could easily access our Terms and Condition by going online to our website and logging in as a member.  From there she would click on Frequently Asked Questions where the Terms and Conditions are clearly stated.  You can be assured that our website mirrors her cellular retailer's website.  In addition, we offer a 30-day, full money back guarantee should any new Member be dissatisfied with the Terms and Conditions.

Once again we are sorry for the inconvenience that Ms. Roland has gone through.  Situations like this do not happen.  This is an extremely odd case.  We are providing Ms. Roland with the funds to purchase a new phone from Verizon's web site and do hope that this will provide a satisfactory conclusion to this entire issue.

Regards,

L.W. Jordan

General Manager

MDPA's Response About Their Policy:

Since the primary benefit of Membership in the MDPA is the loss protection for a registered wireless device, it would be pointless to not cancel a Membership after the limit of liability is exceeded.  In addition, in order to issue a full or pro-rata refund of the Membership fee, a cancellation is required.   You do have a point however, and I will consult with our legal council on this.     We are usually reluctant to change something that has worked successfully for more than 25 years.

Your second question indicates how I have failed to properly explain how the purchase process works.  MDPA does not solicit or accept business directly from the public.   In order to access the web site a new purchaser must have a Member Number and the primary purposes for entering the site is to process a Request For Service, communicate with MDPA, and review the terms and conditions of coverage.

MDPA is only offered by our authorized, on line cellular retailers.  It is made available to those in the process of purchasing a new wireless device.   That offer includes the ability to peruse the details, terms and conditions of coverage and most frequently asked questions, etc. prior to purchase.   So in our opinion, the information most needed by a prospective member is available right where it should be.

Thanks again for your assistance in resolving a very sticky problem.

Regards,

L.W. Jordan

General Manager