February 15, 2007

The District Settles Suit Against InPhonic

Washington, DC - Linda Singer, Acting Attorney General for the District of Columbia, announced today that her Office has settled its lawsuit against InPhonic, Inc. ("InPhonic"), a DC based business that sells wireless phones and plans to consumers across the country. InPhonic has advertised wireless plans through various websites, including Inphonic, Liberty Wireless and Wirefly on behalf of major wireless carriers, including Verizon Wireless, Cingular Wireless, Sprint, and T-Mobile USA.

In June 2006, the District of Columbia sued InPhonic alleging that the company's rebate practices violated the District's consumer protection law. According to the lawsuit, InPhonic imposed restrictive conditions on the rebates on their cellular phones that prevented many consumers from receiving the promised savings. The company failed to disclose charges automatically assessed against consumers who switched their rate plans, returned defective equipment, or failed keep their accounts in good standing.

"It is important for companies to adequately disclose the terms and conditions of their rebate offers, so that consumers can make informed choices. This settlement protects consumers shopping for the best prices, and ensures that they are not misled by InPhonic's rebate offers," said General Singer.

InPhonic agrees to pay $100,000 to the District, and make restitution to some 9,000 customers nationwide. Also, the company agrees to change their marketing and customer service practices, including clearly disclosing rebate restrictions. InPhonic may not complete a sale unless the consumer has specifically consented to the major restrictions.

Two categories of consumers will be eligible for restitution payments: (1) those who complained to either a government agency or a Better Business Bureau ("BBB"), anywhere in the United States, by February 15, 2007; (2) those whose rebates were denied by InPhonic for any of the following four reasons -- the consumer failed to provide the "Guide to Wireless Service"; the consumer failed to provide a carrier invoice with a bill date or failed to provide an order number on their rebate submission; or the consumer's rebate submission was missing customer information.

Page 1 of 2      1  2