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Find A Lawyer For Cell Phone Early Termination Fees

 
Summary

While cell phones are incredibly popular across the U.S., many people report being held hostage to their cellular providers because of expensive and unfair contract termination fees.

Most major cell phone companies; including: Cingular/AT&T, Verizon, T-mobile and Nextel require a one to two year service agreement before activating mobile service.

When customers move to a new area where the service is poor or non-existent, some find themselves forced to pay expensive cell phone contract termination fees ranging from $150 to $300 per phone in order to end their relationship with their cellular carrier. (With a family of four this adds up to a minimum of $600!) Those who refuse to pay may find themselves dealing with harassing credit bureaus plus damaged credit. If you would like to end your cell phone contract without these fees, an attorney may be able to help you.

Additionally, customers who didn’t realize, they inadvertently extended their termination date when they made a change to their contract are told that they too must pay an early cell phone termination fee. This termination extension practice is common among cell phone carriers that few people know about.

One angry Sprint customer posted his troubles on a blog site. The writer, whose initial contract with the cellular carrier had expired, claimed that he was informed via letter that he had a new contract beginning June 16, 2007 and ending June 16, 2009. The new contract which the writer claims was never agreed to also came with an early termination fee of $200.

The expensive termination fees and unauthorized contract extensions have led to class-action lawsuits in almost every American state as well as calls for legislative changes in Washington.

In July 2008, a California Superior Court judge sided with disgruntled ex-subscribers of Sprint Nextel who claimed  the early termination fees, they paid violated California law. In a preliminary ruling, which could be overturned on appeal, Sprint Nextel must pay $18.2 million to its approximate 2-million mobile-phone customers who were assessed an early termination fee. The company was also ordered to forfeit the $54.7 million from other customers who hadn't yet paid the termination charges they were assessed.This is the first legal ruling to say that cell phone termination fees are illegal, and it could affect other similar lawsuits.

Wireless companies have asked the Federal Communications Commission (FCC) to spare them from legal action. The FCC Chairman has said he favors a single national rule that would require early termination fees to shrink over the course of a contract. But, under his proposal, states would no longer have the authority to regulate these charges, thus preventing angry customers from suing their cell phone providers. (Federal law currently gives states the authority to regulate terms and conditions under wireless contracts but they have no power to regulate rates. Ironically, the cell phone lobby has also asked the FCC to re-classify cancellation fees as rates, therefore precluding state courts from having any jurisdiction over them.)

The "Cell Phone Consumer Empowerment Act of 2007," sponsored by Senators Amy Klobuchar (D-MI) and Jay Rockefeller (D-WV), would give customers 30 days to cancel their cell phone contract; mandate that carriers pro-rate termination fees and require that carriers notify customers if any service upgrades would trigger a contract renewal.

The CTIA, which is the wireless company’s lobby, opposes this bill.

Who Can Sue

If you have been charged an unfair early cell phone termination fee or your contract has been extended without your permission, contact a lawyer to discuss your legal options.

Cell phone companies now face lawsuits from consumers who argue that they were charged unfair early termination fees when they either cancelled their contract with good reason, such as lack of service, or had their contracts extended without proper notification.

If you were unfairly charged an early cell phone termination fee and paid it or complained about your termination fee without satisfaction, protect your legal rights by contacting an attorney.

You may also wish to join one of the ongoing class action lawsuits. However, before joining, first contact a qualified attorney who can evaluate your case and determine whether it would be advantageous for you to become part of class settlement.

If you live in California and you paid or were charged an early termination fee on your personal cell phone with a California area code and a California billing address, one of the ongoing Class Action lawsuits could affect your rights. A qualified financial attorney can help you to explore your options.

Interesting Facts

Two billion people worldwide are cell phone subscribers; several countries even have more mobile phones than they have people.

AT&T is the largest cell phone provider with 70 million customers and Verizon Wireless is number two with about 66 million subscribers.

In Arizona, a Senate panel passed a bill that lets customers cancel their contracts if the cell phone carrier is not holding up its part of the deal.

Proposed legislation in Massachusetts may help consumers fight high cell phone termination fees.

Protests over Verizon Wireless' steep contract termination fees led the carrier to pro-rate its fees, becoming the first of the major carriers to do so. Verizon Wireless has now reduced its early termination fees, but the price never dips below $60.  AT&T followed Verizon; AT&T customers who cancel their cell phone contracts will pay a pro-rated fee rather than the standard $175 termination fee. The company also announced that customers who change their calling plans while their contract is still in effect will not be forced to extend their contracts.  In June 2008, T-Mobile USA also joined the ranks. For customers with 91 to 180 days left on their contract, early termination fees will decrease from $200 to $100. The fee decreases again to $50 if there are fewer than 91 days left.

Legal action has also forced some cellular providers to unlock the handsets they sell so that customers who wish to change their carrier can now transfer their old cellular phones to another mobile phone plan.

In July 2004, The Consumers Union won a 32-state settlement for deceptive practices against three major wireless companies: Cingular, Sprint and Verizon. Under terms of the settlement, Cingular Wireless, Sprint PCS and Verizon Wireless (in the states named) must provide customers with accurate coverage-area maps; give consumers at least two weeks to terminate service contracts without incurring penalties; and change the way they advertise and sell services and coverage. The settlement also allows customers to cancel their contract within three days of activating service without paying an activation fee.

Potential Recovery

Wireless companies are reportedly worried about a series of long-running, class-action lawsuits in state courts. A California lawsuit against Sprint Nextel recently awarded $18.2 million to state consumers. Plaintiffs in a New York case in arbitration are seeking $1 billion in refunds.

In a similar class-action suit, Verizon Communications Inc., recently settled with plaintiffs for $21 million to resolve all their outstanding state litigation.

T-Mobile USA is facing a class action lawsuit by over 100 people in 13 states over its early contract-termination fees. The lawsuit seeks $5-million in damages. The plaintiffs argue that the company's early termination fees violate consumer protection laws in 13 states. The thirteen states that could potentially be represented if the lawsuit is certified are: Idaho, Washington, Arizona, California, Florida, Illinois, Massachusetts, Michigan, Missouri, New York, New Jersey, North Carolina, and Tennessee.

In an Iowa lawsuit involving US Cellular in 2000, it was ruled that the carrier would pay $400,000 to the State to be used for consumer related programs, plus establish fair practices on early cancellation fees. The company agreed to a limit of $150 on "break fees" charged to customers who cancel their cell phone contracts, and early cancellation fees in proportion to the time customers had remaining on their contracts.

In 2006, Michigan entered the battle to protect consumers from one-sided and unfair cell phone contracts with a case involving Verizon Wireless.

The Minnesota legislature passed a law which required cell phone companies to provide basic consumer protections, such as advance notice of rate increases or extensions to their contract length.

The "Cell Phone Consumer Empowerment Act of 2007," sponsored by Senators Amy Klobuchar (D-MI) and Jay Rockefeller (D-WV), would give customers 30 days to cancel their cell phone contract; mandate that carriers pro-rate termination fees and require that carriers notify customers if any service upgrades would trigger a contract renewal. If you were unfairly charged an early and paid it or complained about your without satisfaction, protect your legal rights by contacting an attorney.If you live in California and you paid or were charged an early termination fee on your personal cell phone with a California area code and a California billing address, one of the ongoing Class Action lawsuits could affect your rights. A qualified legal expert can help you to explore your options. AT&T is the largest cell phone provider with 70 million customers and Verizon Wireless is number two with about 66 million subscribers.Protests over Verizon Wireless' steep contract termination fees led the carrier to pro-rate its fees, becoming the first of the major carriers to do so. Verizon Wireless has now reduced its early termination fees, but the price never dips below $60.  AT&T followed Verizon; AT&T customers who cancel their cell phone contracts will pay a pro-rated fee rather than the standard $175 termination fee. The company also announced that customers who change their calling plans while their contract is still in effect will not be forced to extend their contracts.  In June 2008, T-Mobile USA also joined the ranks. For customers with 91 to 180 days left on their contract, early termination fees will decrease from $200 to $100. The fee decreases again to $50 if there are fewer than 91 days left. In July 2004, The Consumers Union won a 32-state settlement for deceptive practices against three major wireless companies: Cingular, Sprint and Verizon. Under terms of the settlement, Cingular Wireless, Sprint PCS and Verizon Wireless (in the states named) must provide customers with accurate coverage-area maps; give consumers at least two weeks to terminate service contracts without incurring penalties; and change the way they advertise and sell services and coverage. The settlement also allows customers to cancel their contract within three days of activating service without paying an activation fee. In a similar class-action suit, Verizon Communications Inc., recently settled with plaintiffs for $21 million to resolve all their outstanding state litigation.In an Iowa lawsuit involving US Cellular in 2000, it was ruled that the carrier would pay $400,000 to the State to be used for consumer related programs, plus establish fair practices on early cancellation fees. The company agreed to a limit of $150 on "break fees" charged to customers who cancel their cell phone contracts, and early cancellation fees in proportion to the time customers had remaining on their contracts.

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