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AndreA (Offline)
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Arrow USA: termination fee - 30-07-2008, 11:44

Poor Sprint

Sprint Ordered to Pay Millions in Early Termination Fee Flap

A judge is ordering Sprint Nextel to refund $18.25 million to California customers who paid early termination fees to get out of their mobile-phone contracts. The tentative decision also requires the company to forgo $54.75 million in early termination fees it levied but went unpaid by California consumers.
A California judge late Monday ruled (.pdf) that the fees, which range as high as $200 a line, were an unlawful penalty under California law and were "implemented primarily as a means to discourage customers from leaving" their contracts.
The decision comes as major wireless carriers -- T-Mobile, Verizon and AT&T -- have recast their early termination fee schedules and pro-rated them, in part to avoid or settle lawsuits. Verizon agreed two weeks ago to pay $21 million to settle a similar class action.
A pro-rated fee means a customer pays less to break a contract the longer one continues the contract. Contracts usually vary from one to two years.
The Federal Communications Commission is considering regulating early termination fees on a nationwide basis. The FCC is also weighing whether to block class action lawsuits like the Sprint case. No timetable for a decision has been set.
Sprint and other carriers said they charged the fees to subsidize handsets and monthly rates.

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Bossman (Offline)
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Default 30-07-2008, 12:29

I know...Sprint is going through some tough times. However, a prorated early termination fee, like the one recently implemented by the other carriers, makes the most sense. It's a ripoff to ask customer that breaks the contract, 11 months into a 12 month contract to pay the full termination fee.

What I would like the Governing bodies to also do is to step in and do something about the insane roaming fees we pay when we travel outside the US. Just like Vivian Redding and Co. have done for the EU.

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