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Bill would bar phone, car insurance penalties

Service members receiving orders to deploy or for reassignments to and from overseas bases would be allowed penalty-free cancellation of contracts for their phone, cable television service, automobile insurance and utilities, under a bill introduced by an Iraq war veteran.

Rep. Patrick Murphy, D-Pa., calls his plan the 21st Century Servicemembers Protection Act. The bill, HR 3298, would greatly expand financial and legal rights under the Servicemembers’ Civil Relief Act to allow the termination or suspension of contracts signed before military orders were received.

The bill was referred to the House Veterans’ Affairs Committee, which already is considering updates to the current SCRA.

Murphy is a former Army judge advocate who deployed to Iraq in 2003 as a paratrooper with the 82nd Airborne Division. Since being elected to Congress in 2006, he has pushed to update military personnel policies. He is not a member of the veterans’ committee but does sit on the House Armed Services Committee, which makes recommendations about changes in legal protections for deployed troops but does not have legislative jurisdiction over the law governing service members’ rights.

With 22 co-sponsors, Murphy is proposing a major extension of current cancellation rights that allow apartment and automobile leases to be canceled when a service member receives permanent-change-of-station orders or is deployed for more than 90 days for housing and 180 days for vehicles.

His bill specifically would apply to cellular phone service, cable or satellite television service, Internet service, automobile insurance, water, electricity, oil, gas, telephone and other utilities.

Under Murphy’s proposal, a service member or a service member’s dependent would have the option of terminating or suspending a service contract if he receives reassignment orders to or from a location outside the continental U.S., or receives orders for a deployment of 90 days or longer, or has received orders to deploy a minimum of 180 days.

A company could be notified by hand, fax, mail or private messenger of the termination or cancellation. A company could not impose an early termination charge and would have to refund any fees paid in advance, However, canceling a contract does not mean a service member or his dependent does not have to pay any balance for service provided before the cancellation takes effect. In cases where fees were paid in advance, a company would have 30 days from the effective date of the termination to provide a refund and a service member could also receive up to $10,000 in damages and have his attorney’s fees covered for each violation.

Murphy’s bill also would increase the potential penalty for companies that do not comply with the Servicemembers Civil Relief Act by lowering debt interest rates to 6 percent for pre-military loans when service members are mobilized for active duty. Up to $10,000 in fines plus attorney fees would be allowed as damages when a creditor willfully or negligent violated the law.