Current Events in May 2014

After falling for two consecutive weeks, mortgage applications are on the upswing.

Data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey show applications jumped 5.3% on a seasonally adjusted basis in the week ending May 2.

The Refinance Index was up 2% from the previous week, while the refinance share of mortgage activity dipped 1% -- to 49% of total applications. The adjustable-rate mortgage (ARM) share of activity rose to 9% of total applications.

"It is official: we are in a majority purchase market for the first time since 2009,” said Mike Fratantoni, MBA’s Chief Economist. “A sizable increase in purchase applications last week likely reflected the impact of somewhat lower mortgage rates as well as continued growth in the job market, as confirmed by Friday’s employment report from the BLS. Despite the strong increase in the purchase market last week, volume continues to run 16 percent behind last year's pace."

Contract interest rates

• The average contract interest rate for 30-year fixed-rate mortgages (FRMs)with conforming loan balances ($417,000 or less) fell 6 basis points -- from 4.49% to 4.43% -- the lowest rates since November 2013, with points decreasing to 0.21 from 0.38 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
• The average contract interest rate for 30-year FRMs with jumbo loan balances (greater than $417,000) dropped to 4.29% -- the lowest rate since June 2013 -- from 4.37%, with points remaining at 0.14 (including the origination fee) for 80% LTV loans. The effective rate was down from last week.
• The average contract interest rate for 30-year FRMs backed by the FHA was down 4 basis points to 4.13%, with points decreasing to -0.03 from 0.10 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 15-year FRMs slipped to 3.52% from 3.53%, with points decreasing to 0.22 from 0.31 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 5/1 ARMs dropped 5 basis points -- to 3.21%, with points falling to 0.29 from 0.35 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The survey covers over 75 percent of all U.S. retail residential mortgage applications.

Discount School Supply of Monterey, Calif., is recalling about 3,700 Excellerations magnetic color sorting boards.

The magnet in the wand can detach and the plywood backing can crack and release small metal balls that are sandwiched between the board and a clear plastic cover. These pose choking and serious internal injury risks associated with ingestion of a magnet and metal ball. Additionally, the surface paint on the metal balls contains levels of lead that exceed the federal lead paint standard.

The company has received six reports of the plywood backing cracking and making the small metal balls accessible to children, and two reports of the magnet detaching from the wand. No injuries have been reported.

This recall involves Excellerations magnetic color sorting boards with cupcake cut-outs that are used to teach color and sorting to young children. The recalled sorting board is made of plywood and is 16 inches wide and 12 inches high and has the Excellerations name and logo on the front in the bottom right corner.

A clear plastic cover is attached to the board by rivets and a 4-inch long wand with a magnet in one end is attached to the top of the board by a 13.5-inch plastic cord. The face of the board has one jar-shaped cut-out and six cupcake-shaped cut-outs that are colored red, yellow, blue, green, orange and purple.

Beneath the cover are about 60 multi-colored metal balls, each 1 centimeter in diameter. Children use the wand to move the balls around the board through channels from the jar to the cupcakes.

The boards, manufactured in China, were sold at discountschoolsupply.com from January 2013, through March 2014, for about $36.

Consumers should immediately stop children from using the recalled board, put it out of their reach and sight, and contact the company for a full refund.

Consumers may contact Discount School Supply at (800) 338-4430 from 7 a.m. to 7 p.m. CT Monday through Friday.

Eugene Oregon, Inc., of Levittown, Pa., is recalling the following products:

Laboratory analysis shows the products contain undeclared amounts of the active pharmaceutical ingredients sildenafil and tadalafil -- FDA-approved pharmaceutical ingredients used to treat erectile dysfunction.

The company says it has not received any reports of adverse events related to this recall.

Consumers should stop using these products immediately and can return them to Eugene Oregon, Inc., 922 S. Woodbourne Rd. #304, Levittown, PA 19057-1001.

Consumers with questions may contact Eugene Oregon at 1-800-538-3411 Monday through Friday between 9:00 a.m. and 5:00 p.m. EST.

Cycling Sports Group of Wilton, Conn., is recalling about 80 model year 2014 Cannondale tandem bicycles.

The bicycle fork can break and cause the riders to lose control, posing a risk of injury.

The company has received two reports of loose steerer tubes. No injuries have been reported.

This recall involves three models of 2014 tandem Cannondale bicycles, road 1, road 2 and 29 tandem. The road 1 and 29 tandem bicycles were sold in black with white graphics and the road 2 was sold in white with red and black graphics. “Cannondale” and “T1” or “T2” are printed on the aluminum frame bicycle. The 29 model is a mountain bike with 29-inch wheels and a 29 graphic decal affixed to the frame.

The bicycles, manufactured in Taiwan, were sold at authorized Cannondale dealers from October 2013, to December 2013, for between $2,700 and $5,400.

Consumers should immediately stop using the bicycles and return them to the nearest authorized Cannondale dealer to receive a free replacement fork.

Consumers may contact Cycling Sports Group at (800) 726-2453 from 9 a.m. to 6 p.m. ET Monday through Friday, or by email at custserve@cyclingsportsgroup.com.

There are many ways to buy a used car. You can go to a dealer, browse through the newspaper classifieds or look on Craigslist.

A few brave souls, in hopes of getting a sweet deal, go to public auctions. They may, in fact, find a car at a bargain price but there's also a good chance it's going to need a lot of work.

According to Popular Mechanics, a public auto action is something the public should avoid. The magazine says the only consumers who should try to purchase a vehicle at a public auction are exceptional mechanics.

Pitfalls

What kinds of pitfalls await the innocent car buyer? Cars in too sorry shape to be traded in. Cars with so many miles the odometers have stopped working. Oh yes, a few flood cars thrown in for good measure.

However, you may also find some repossessed vehicles, older rentals and cars seized by tow trucks and never claimed. RepoKar Auto Auction, a company that runs public auctions, says many of the sellers at these auctions are financial firms who want to sell the off-lease vehicles returned at the end of the lease period.

But the nicer off-lease vehicles tend to show up at dealer wholesale auctions, which are rarely open to the public. That's where dealers compete for mostly late-model cars that can be detailed and put on the lot to be sold for a profit.

There are also government auctions, which are usually open to the public. There, you will find government vehicles that have outlived their usefulness. Law enforcement agencies also sell confiscated cars and trucks at government auctions.

Tips from an auctioneer

Former auto auctioneer Steve Lang, writing on the automotive website Edmunds.com, says the world of auto auctions is a world the average buyer “enters at their own peril.” He warns that almost nothing is as it first appears to be.

Since you usually aren't allowed to test drive the vehicles – or even start them – before bidding, a car in mint condition could have a blown head gasket or other issues under the hood.

Lang says knowing who is selling the vehicles at an auction is critically important. If the cars have come from a bank or a new car dealer, there's a chance you might find a worthy vehicle.

But if the cars have come from a used car dealer, expect to see a lemon parade. If a used car dealer can't sell a car on his lot, it's going to wind up at a public auction.

Donated vehicles

Public auctions may also be places where vehicles donated to charitable organizations are sold. A donated vehicle might be a good buy, but often it isn't. Often someone donates a car after they've driven the life out of it and can't get enough to make it worthwhile trying to sell it.

If you are determined to give auctions a try, it's best to attend a few without bidding. That's because, like many auctions, the action unfolds at a fast pace. It's easy to get overwhelmed.

Fast lane

“Auctions are the fastest of fast tracks—you are betting you know what you want, that you can recognize a car’s strengths and faults, that you know what it’s worth, and that you have the cool head to stop bidding at that point,” cautions Car and Driver magazine. “The attraction of auctions is that there are rare cars to be had that are not found anywhere else. Auctions also let you avoid dealer markups or overly ambitious owners.”

However, in the age of eBay, when people routinely bid on cars without seeing them, an auto auction isn't as intimidating as perhaps it should be. Automotive site Autos.com says it is true you can get a car for a very low price, but you should be concerned if it's too low.

An amazing deal just may be too good to be true.

Are deregulated third-party energy providers a good deal for consumers? When we tried asking that question last April, we couldn't pin down an absolute yes-or-no answer, but noticed some frequently recurring themes among our many readers who wrote us to complain about third-party providers.

For example, almost everyone who had problems with Ambit Energy said they were initially promised low or even “locked-in” rates that would suddenly skyrocket without warning or explanation, to the point where Ambit customers sometimes wound up paying rates two or three times higher than their local regulated utility provider's. Customers who tried leaving Ambit in favor of another supplier routinely found it difficult to do so. (We wrote Ambit to ask about such complaints in particular and Ambit rate policies in general, but Ambit never responded to our request.)

However, legislative relief might be on the way, at least for deregulated energy customers in Connecticut. The state House of Representatives unanimously approved a bill which, if signed into law, will require energy providers to tell customers about rate increases in advance, gives customers the right to change energy providers within 45 days, prohibits suppliers from raising rates during the first three billing cycles of a new contract, and also prohibits suppliers from charging cancellation fees to customers who move elsewhere within the state and stay with the same electrical supplier.

Despite these protections, various groups have criticized the bill for not going far enough, based on two shortcomings: one, the bill only applies to residential energy customers, not commercial or business users; and two, the bill does not impose caps on variable rates.

The bill already passed the state Senate, and now goes to governor Dannel Malloy for signing.

Some things just aren't as much fun as they used to be. Shopping can be frustrating when you can't find a human being to listen to you. Traveling can be a drag when there are fewer flights to choose from and your luggage gets lost.

A recent Harris Poll set out to find the things that set consumers off the most. It turns out a lot of them have to do with air travel.

Once upon a time stand-up comedians made jokes about the poor quality of airline food – but that was when airlines actually provided meals to passengers in coach. Today it's a lot more common to hear people complain about a la carte costs and fees airlines charge for just about everything – including the food.

Hogging the overhead bins

But what qualifies as the most annoying things about air travel? Two-thirds of those questioned say travelers who misuse the overhead bins – by putting all their items overhead or using a bin in a different section of the plane, for example -- annoy them the most, while about 35% are most annoyed with travelers who recline their seats in the cramped coach cabin.

When we looked over complaints about air travel consumers posted on ConsumerAffairs, customer service deficiencies seemed to be a common theme. Rebeca, of New Albany, Ind., was upset that when she booked a US Airways flight for her honeymoon and found her seat was not with her new husband.

Rebeca said she sent a number of emails to the airline, requesting help in being assigned a new seat. The emails, she says, received no reply.

“I finally gave up today and purchased, for an additional $59 per ticket, that pleasure,” she wrote. “In summary, I paid an extra $112 to have a guaranteed seat next to my new husband.”

Highway annoyances

Consumers also tend to get annoyed on the road. In the survey respondents are split on whether tailgaters or slow drivers who stay in the passing lane are the more grievous offenders, with the tailgaters taking the annoyance crown by a slim 53% to 47% margin.

Kim, of Newark, Del., was highly annoyed when she used Priceline to book a hotel room. After making a reservation for a stay, she says she remembered she needed an extra room, so returned to the site where she booked the second room.

“When we got to the hotel I found out I was booked for three rooms,” Kim wrote in a ConsumerAffairs post. “I said I only needed two and to cancel one. They said I had to do it through Priceline. When I tried to cancel one room with them they said it was too late and they marked me as a no-show for one of the rooms.”

Tech troubles

Consumers are also increasingly annoyed by technology. James, of Beaumaris, Australia, writes that he purchased a new Microsoft Surface Pro 2 tablet in December.

In March, the machine wouldn't turn on,” James tells ConsumerAffairs. “After three weeks of waiting, Microsoft finally replaced the machine. All of my data and my applications were lost. It took an entire day to reconstruct everything on the new machine. Yesterday it happened again. The machine won't turn on.”

Mobile devices also increasingly get on consumers' nerves. The Harris Poll finds nearly everyone is annoyed by people carrying on cell phone conversations in a restaurant.

But 35% of those questioned are also annoyed by people who check their smartphones for new email while carrying on a face-to-face conversation. And speaking of email, 60% of us get annoyed by people who write emails in all caps.

Nearly as annoying, say consumers, are people who use “reply all” on all emails and those who simply don't reply to a message.

Of all the scams seeking to separate honest people from their money, the “check scam” (or “cheque scam,” if you prefer Commonwealth spelling conventions) is usually most likely to hit small business owners, or maybe direct-sales representatives selling the likes of Avon or Mary Kay from their homes — in other words, the people who in today's economy are most likely to accept checks from people they don't already know.

But this week, the Better Business Bureau warned about yet another variant of the check scam, this one tied in with an employment scam offering job-seekers paid work as “secret shoppers.”

The label “check scam” refers to any type of scam that first requires you, the victim, to mistake a fake check for the real thing. The simplest (and oldest) form of check scam is simply buying goods or services and paying with a bad or fake check, in which case you, the seller/victim, have lost the value of whatever good or service you just sold.

Most check scams, like the secret shopper scam, are far more complex. They ask you to deposit a check into your account and then send money back to the scammer who sent you the fake check in the first place. For example, here's how the Better Business Bureau blogger described the Secret Shopper check scam on May 5:

You receive an email informing you that you’ve been offered a job as a secret shopper. To get started, the message instructs you to reply and confirm your mailing address. After doing this, you will receive instructions and a check to cover your fee and shopping expenses. … Your instructions tell you to deposit the check, subtract your fee and shopping expenses and wire the rest back—but don’t do it. The check looks real, but it’s a fake. … If you deposit the check and draw money against it, you will be responsible for those funds. When the bank rejects the fake check, they will delete the advanced funds from your account.

With minor variations, that's how most check scams work; they vary only in the excuse they invent to justify why you, the person who supposedly just received money in the form of a check, should give some of that money to the check-writer. If you sell Avon or Mary Kay, for example, the scammer might place a large order with you, send a check for payment, and tell you they “accidentally” wrote the check for too much money... so, hey, why don't you just deposit that whole check in your account, then withdraw the extra money and wire it back to me?

Indeed, many of the classic infamous “Nigerian email” scams turn out to be check scams; if you respond, the Crown Prince Oil Minister or whatever super-rich person the scammer's pretending to be will often send you a check for a large sum of money and ask you to wire back a small fraction of it. Of course, anything you send ultimately comes out of your own bank account, since that check was utterly worthless.

The simplest and easiest way to protect yourself from check scams is to remember three rules. The first two rules are check-specific: when you deposit a check into your bank account, never assume the money is actually there until the bank tells you the check has cleared. And if you're in business and accept checks as payment, never accept checks for overpayment.

The third rule applies to everybody, whether you accept checks or not: never, ever wire money to somebody you don't know.

The traffic's already pretty bad in Los Angeles and now Google and Amazon are planning to make it ever worse. Or better, depending on how you look at it.

The online giants have both recently announced roll-outs of same-day delivery services in various parts of the Los Angeles area. Google is expanding its Google Shopping Express program to West Los Angeles and New York City's Manhattan, just a few days after Amazon announced that its same-day service was open for business in Los Angeles, San Francisco, Seattle and Phoenix.

To try out the Google service, go to Google.com/express to shop for items from Costco, Guitar Center, L'Occitane, Smart & Final, Staples, Target, Toys R Us and Walgreens. Orders are accepted until 4 p.m. for delivery between 6 and 9 p.m. 

Google says there is no minimum purchase, surcharge or markup. Shoppers can sign up for a 6-month free trial or pay $4.99 per item for a la carte ordering.

Google says it hasn't figured out what the final pricing of the service will be.

Over at Amazon, more than 1 million items are available. Click on the "Get It Today" filter on the left panel of Amazon's website or go to Amazon.com/sameday. 

Orders can be placed as late as noon for delivery before 9 p.m. Amazon Prime members pay $5.99 per order. Non-Prime members pay $9.98 to have the first product shipped, plus 99 cents for each additional item.

We often hear that taking an aspirin a day -- even a low dose -- can help you ward off a heart attack or stroke. But can it really?

As is often the case, the answer is: it depends.

Scientific evidence shows that taking an aspirin daily can help prevent a heart attack or stroke in some people -- but not in everyone. It also can cause unwanted side effects.

Robert Temple, M.D., deputy director for clinical science at the Food and Drug Administration (FDA), says one thing is certain: You should use daily aspirin therapy only after first talking to your doctor, who can weigh the benefits and risks.

Who can benefit?

"Since the 1990s, clinical data have shown that in people who have experienced a heart attack, stroke or who have a disease of the blood vessels in the heart, a daily low dose of aspirin can help prevent a reoccurrence," Temple says. (A dose ranges from the 80 milligrams (mg) in a low-dose tablet to the 325 mg in a regular strength tablet.) This use is known as "secondary prevention."

However, after carefully examining scientific data from major studies, FDA has concluded that the data do not support the use of aspirin as a preventive medication by people who have not had a heart attack, stroke or cardiovascular problems -- a use that is called "primary prevention."

In such people, the benefit has not been established but risks -- such as dangerous bleeding into the brain or stomach -- are still present.

Caution needed with blood thinners

When you have a heart attack, it's because one of the coronary arteries (which provide blood to the heart), has developed a clot that obstructs the flow of blood and oxygen to the heart. Aspirin works by interfering with your blood's clotting action.

Care is needed when using aspirin with other blood thinners, such as warfarin, dabigatran (Pradaxa), rivaroxaban (Xarelto) and apixiban (Eliquis).

What if you haven't had heart problems or a stroke but -- due to family history or showing other evidence of arterial disease -- are at increased risk? Is an aspirin a day best for you?

Again, Temple emphasizes, the clinical data do not show that a benefit in such people.

He adds, however, that there are a number of large-scale clinical studies underway investigating the use of aspirin in primary prevention of heart attack or stroke. FDA is monitoring these studies and will continue to examine the evidence as it emerges.

What to do

The bottom line is that in people who have had a heart attack, stroke or cardiovascular problems, daily aspirin therapy is worth considering. And if you're thinking of using aspirin therapy, Temple says you should first talk to your health care professional to get an informed opinion.

Finally, how much aspirin you take matters. It's important to your health and safety that the dose you use and how often you take it is right for you. Your health care professional can tell you the dose and frequency that will provide the greatest benefit with the fewest side effects.

If your health care professional recommends daily aspirin to lower the risk of a heart attack and clot-related stroke, read the labels carefully to make sure you have the right product. Some drugs combine aspirin with other pain relievers or other ingredients, and should not be used for long-term aspirin therapy.

Office Depot bought rival Office Max last year to get more stores in more places. But now it's decided it has too many stores and will close at least 400 of them by 2016.

The company said at least 150 stores are scheduled to close this year, with the rest being shuttered in 2016.

"The overlapping retail footprint resulting from the merger provides us with a unique opportunity to consolidate and optimize our store portfolio," said Roland Smith, Office Depot CEO, in a statement. He said improving the chain's store footprint was a "critical priority." 

The company, which currently operates about 2,000 stores, said it had not finalized the stores to be closed.

Office Depot reported a net loss of $109 million for the quarter ended March 29, compared to a $7 million loss for the same period a year earllier. Sales were up but profits were down.

Office Depot isn't alone. Staples and Radio Shack have both announced plans to close some of their stores and Home Depot has said it won't be opening many new stores. 

Like other retailers, the companies are hoping to beef up their online presence to catch up with Amazon and other online giants who have been steadily decimating the big box business.

Pacific Organic Produce of San Francisco, Calif., is recalling a limited number of cases of organic Tommy Atkins mangos (PLU numbers 94051 & 94959) that were sold under the Purity Organic brand between the dates of April 14, 2014, and May 2, 2014.

The fruit may be contaminated with Listeria monocytogenes.

No illnesses have been reported in association with the recall and no other Purity Organic brand products are being recalled.

The PLU number is printed in the middle of the PLU sticker on the fruit. The mangos were shipped to retailers and distributors in limited quantities in Arizona, California, Colorado, New Jersey and Texas.

Only the specific PLU numbers and sell dates identified above are included in this recall.

Consumers who have the recalled product should not consume it, but rather should discard it and retain their store receipts, PLU stickers or any other proof of purchase they may have.

Consumers with questions may call Amy Rosenoff at Pacific Organic Produce customer service at 415-673-5555 from 8:00 am to 4:00 pm (PT) Monday – Friday.

Sixdog Investments recalling some cases of certified organic eggs,

No illnesses have been reported to date from consumption.

The product was distributed through retail outlets in Colorado and possibly Idaho, Kansas, New Mexico and Utah.

The eggs are packed in dozen and half-dozen packages and have a packing date of 93, 94, 97, or 98; an expiration date of “051814”, “051914”, “052214”, or “052314”. They also include a location code of 1 or 3. This information is located on a white sticker on the end of each carton.

Consumers who have purchased the recalled products may return them to the place of purchase for a full refund.

Consumers with questions may contact the company at (970) 286-0080 from 10:00-5:00 Monday through Friday.

General Motors is recalling 56,214 model year 2007-2008 Saturn Aura vehicles manufactured April 24, 2006, through October 31, 2007, and equipped with a four speed automatic transmission.

The transmission shift cable in the affected vehicles may fracture. Should that happen while the vehicle is being driven, the driver will not be able to shift the lever to the "PARK" position, or remove the ignition key. That poses the risk that the vehicle will roll away as the driver and other occupants exit the vehicle.

GM will notify owners, and GM dealers will replace the shift cable assembly and mounting bracket, free of charge. The manufacturer has not yet provided a notification schedule.

Owners may contact General Motors at 1-800-553-6000. GM's number for this recall is 14152.

Wells Enterprises is recalling Blue Bunny Premium Bordeaux Cherry Chocolate Ice Cream sold at retail grocery stores in Kansas, Indiana and Iowa.

The product may contain egg, an allergen not declared on the label.

No customer illnesses have been reported to date.

The recalled Blue Bunny Premium Bordeaux Cherry Chocolate Ice Cream was sold in 56-fluid ounce packages with LOT #40010 TTT 19115 18:00 4100 and a UPC 070640034123 with a Best Used By Date of 10/9/15.

Customers should return the product to stores for a full refund or replacement.

Schnucks Kitchen of O’Fallon, Mo., is recalling approximately 130 pounds of Curry White Meat Chicken Salad product.

The product may be contaminated with with Listeria monocytogenes.

There have been no reports of illnesses associated with consumption of this product.

The Chicken salad product, in three-pound bags, was produced on April 24, 2014, and shipped to Schnucks retail grocery locations for deli distribution in Illinois, Indiana, Iowa, Missouri and Wisconsin. The following product is subject to recall:

• 3-lb. sealed plastic bags containing “CURRY WHITE MEAT CHICKEN SALAD WITH WALNUTS.”

Because the product was sold at deli counters, consumer packaging may vary. Plastic containers in various sizes may bear a purchase date between April 24, 2014, and May 2, 2014. Bulk case labels or packaging may bear the case code 0989674 or 0963124 as well as establishment number “EST. P-13562” inside the USDA mark of inspection.

Consumers with questions regarding the recall may contact Joannie Taylor, Director of Consumer Affairs, at (314) 994-4400.  

Anhing Corporation of Los Angeles, Calif., is recalling Caravelle Brand Chili Powder in 8-ounce plastic tubs lot code 560916..

The product has the potential to be contaminated with Salmonella.

There are no illnesses reported to date.

The product was distributed through retail stores.

This product comes in a clear plastic tub with a red lid, with an orange paper label which reads in part “Caravelle CHILI POWDER HOT Net Weight 8 oz. (227G) Packed For ANHING CORP. Los Angeles, CA 90031 PRODUCT OF THAILAND.” It also contains Thai and Chinese wording.

The Bar Code is: 080736115551. There are two codes involved -- 560916 or 570115 -- located on a white label adhering to the bottom of the plastic tub.

The company has ceased the distribution of the product as the investigation into the cause of the problem continues.

Consumers who have purchased this product should return it to the place of purchase for a full refund.

Consumers with questions may contact the company at 1- 323-221-8003 between 9AM and 5PM PST.

Many Verizon Wireless subscribers recently received some unexpected but pleasant news. The company announced it would lower their bill by $10 for each upgrade-eligible device on the plan.

Why would Verizon Wireless cut your rate without your even asking? Simple, for the first time there is a lot of price competition in the mobile phone industry and much of it is coming from T-Mobile.

The No. 4 carrier is shaking things up. In reporting first quarter earnings last week T-Mobile said it was not only profitable, but managed to sign up 1.3 million new post-paid customers, more than AT&T, Verizon and Sprint combined.

Fastest-growing wireless company

"A year ago I promised that we would bring change to what I called this arrogant U.S. wireless industry. We are delivering on that promise and our results reflect the growing customer revolution that we've ignited," said John Legere, President and CEO of T-Mobile.

Now with close to 50 million customers, T-Mobile just posted its fourth straight quarter of rising service revenue. Its 1.3 new post-paid subscribers translates into an astounding 136% year-over-year growth in a industry that is approaching full maturity. The growth, quite simply, is coming at the expense of its larger competitors.

Siding with consumers

For years consumers have been asking why they have to sign a two-year agreement just to be able to be able to have a cell phone. Since Legere took the T-Mobile helm a year ago, he's asking that too.

As a result, T-Mobile no longer requires customers to sign service contracts. On March 26, 2013, it announced a simplified unlimited "Simple Choice" service plan with no annual service contract.

Meanwhile, device financing with the Equipment Installment Plan (EIP) allows qualifying customers to obtain new phones with little out-of-pocket costs.

But the company didn't stop there. It has offered free wireless plans if you have a tablet in addition to a smartphone. It allows you to upgrade your smartphone every few months instead of every two years.

Then it made a move that has perhaps caused the most disruption in the mobile phone space. T-Mobile will pay your early termination fee when you drop your current provider, trade in your device and sign-up with T-Mobile.

While many industry analysts say such a policy is not sustainable over the long haul, it has obviously produced results in the short term.

No more roaming charges

For international travelers, using a cell phone overseas often results in shockingly-high roaming charges – sometimes thousands of dollars. But T-Mobile's new international plan gives its Simple Choice customers unlimited data and texting worldwide in more than 100 countries.

At the same time, T-Mobile continues to build out its U.S. network. It says it now has 4G LTE service in 233 metro areas covering a population of 220 million.

It's little wonder the rest of the industry is in reaction mode. For example, AT&T recently launched a plan with four phones sharing 10 GB of data a month for $160.

Almost didn't happen

In 2011 AT&T announced plans to acquire and merge with T-Mobile, which would have reduced the Big 4 carriers to the Big 3. But then the U.S. government stepped in.

The Justice Department sued to block the merger. The Federal Communications Commission (FCC) ruled the merger would be anti-competitive.

"It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the US economy desperately needs both," AT&T spokesman Larry Solomon said at the time.

But without that action, it is all but certain that using a cell phone today would be significantly more expensive and confining than it is.