The American Financial Services Association (AFSA) has raised concerns regarding a proposed rule by the Federal Communications Commission (FCC) that would require handsets to be unlocked even if the installment contract has not been paid off. AFSA's letter to the FCC outlines three primary issues with this proposal.
First, AFSA questions whether the FCC has the authority or jurisdiction to mandate handset unlocking. The association points out that several courts have ruled that the FCC cannot interfere with contracts between wireless providers and third parties, including customers, nor can it nullify state-law remedies.
Second, AFSA argues that mandating device unlocking increases financial risks for wireless providers relative to their customers. It also reduces options for offsetting these risks through securitization arrangements.
Third, AFSA notes that in 2019, the FCC acknowledged that mandating handset unlocking too soon could increase potential fraud. Bad actors could make purchases under false names and resell unlocked handsets.
While AFSA expresses a willingness to work with the FCC to improve consumer choice and flexibility, it emphasizes that the increased risk from this new rule would lead to higher costs for consumers and greater risks for businesses.
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