Cell Phone Services Increasingly Seeking CU Partners

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Two separate cellular phone providers have recently tapped into the credit union community with offers to provide members with discounted wireless services.

Under an agreement between Sprint and the Michigan Credit Union League's CUcorp, members across the nation can get a 5% break on all rate plans and monthly recurring charges, said Terry Krieg, VP with Cucorp Images & Ink.

A separate reseller of cellular services, Cellular Service of Portland, Ore., has announced intentions to expand its services to credit union members through individual agreements with CUs throughout the nation.

Cellular Service, in business since 1995, buys cellular services in bulk from major providers and resells them under its own brand name and at discounted rates and without long-term contracts or cancellation fees.

President John Marick said the partnership that connects wireless service providers with the financial services industry is part of a growing trend and what he sees as a natural fit between the two.

"In order to participate, the members have to have their monthly charges billed back to their credit or debit card," Marick explained. "Other than that, there is nothing for the credit union to do. We take care of all the costs and provide all the materials."

In addition, he said, credit unions are not financially liable if their members default on payment. "Each member receives a full statement of what they owe with a 10% discount of the rate plan they've chosen," Marick said. "The invoice has a due date in which the payment is automatically taken through their debit or credit card."

He said Cellular Service is marketing its services via CU statement stuffers, direct mail and joint mail campaigns. With a handful of agreements under way, he said, Cellular Service is now targeting individual credit unions at trade shows and in credit union publications.

Kreig said Cucorp Images & Ink launched its campaign earlier this month offering a 5% discount on all rate plans and monthly recurring charges, "We're thrilled to be able to offer credit union members across the country the superior wireless service Sprint is known for at a discounted rate," Krieg said. "The Cucorp-Sprint agreement offers credit unions another way to showcase the value of credit union membership."

'Members Using This Service'

Although this is the first time Sprint has entered into an agreement of this kind, Krieg said, the MCUL had a similar arrangement with Cellular One for the last eight years to serve members in Michigan and Ohio.

While there are risks of losing members who are unhappy with their cellular services, Kreig said, experience has indicated no cause for concern.

"Members have been very much using this service," he said, adding that he can recall maybe a "half dozen" complaints, most of which stemmed from a "situation of hardship."

Krieg said the arrangement allows participating credit unions free use of marketing materials and rate plan information along with 20% of the earnings received from its member users.

"If their members choose Sprint, no matter which plan, they receive a at least 5% plus any promotional rate on top of that," Krieg said, adding that the league chose Sprint as its partner because of its "superior wireless service" that includes coast-to-coast calling, simplified plans, and national rates with no roaming or long distance charges.

He further noted the new law permitting anyone who switches from one cell phone provider to another to retain their phone number.

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