Judge Rules That Early Termination Fees are Illegal

Does it seem like every time you get the latest cell phone you end up in a new two year agreement with the phone company?  Even if you wanted out the early termination fee is so high you decided to stick with your phone company.  Early Monday Alameda County Superior Court Judge Bonnie Sabraw said Sprint Nextel must pay California mobile-phone consumers $18.2 million as part of a class-action lawsuit challenging early termination fees.  The judge also told the company to stop trying to collect $54.7 million from other customers who haven't yet paid the charges they were assessed.

Of course Spring Nextel is going to appeal arguing in the lawsuit that such fees - which ranged from $150 to $200 - were outside the purview of California law.  So why was Sprint Nextel the only ones affected?  Because T-Mobile, AT&T and Verizon Wireless sketched out a plan in which cancellation fees would be reduced over the life of the cell phone contract.  So how will cell phone companies get passed this termination fee situation?  The FCC may decide to define such fees as "rates," which are subject to federal regulation under federal law. But if that happened, it is unclear how that might affect lawsuits in California and other states.

 

http://www.mercurynews.com/ci_10039461?source=most_viewed

 



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