No more early exit cell fees?

j_garcia

j_garcia

Audioholic Jedi
In one of the most significant legal rulings in the tech industry this year, a Superior Court judge in California has ruled that the practice of charging consumers a fee for ending their cell phone contract early is illegal and violates state law.

The preliminary, tentative judgment orders Sprint Nextel to pay customers $18.2 million in reimbursements and, more importantly, orders Sprint to stop trying to collect another $54.7 million from California customers (some 2 million customers total) who have canceled their contracts but refused or failed to pay the termination fee.

Article
 
J

jamie2112

Banned
Thats interesting. I hope that the ruling extends to every state. I wonder what's going to happen on the national scene. Phone companies have been
holding customers hostage with their $250 early termination fees and I for
one would like to see this spread....
 
j_garcia

j_garcia

Audioholic Jedi
It will be in litigation for years I am sure, while they come up with an alternative plan to keep your money...I mean keep you as a customer. Most likely what we will see is something like what was mentioned in the article, a pro-rated system based on how close to the end of your term is.
 
M

markw

Audioholic Overlord
I'm not up on the latest on this but I do recall hearing, a few months ago, that a "flat" cancellation fee is on the way out, but it will be pro-rated for the amount of time remaining.

i.e, if the fee is $240 for a two year contract and they cancel with six months remaining, it would be $60.

That at least seems fair since the companies generall subsidize the purchase of the phones up front and make it back over the length of the contract.

As my economics 101 class taught me, those "free" phones ain't free.

Somebody has to pay for ;em.
 
B

Buckeye_Nut

Audioholic Field Marshall
That ruling will never hold up.
 
Matt34

Matt34

Moderator
I attempted to use the military deployment clause to end my contract with Sprint. They made it as difficult as humanly possible for me to submit the paperwork to the proper people. Apparently you have to fax it to an out of state location; you can't do it in store or over the phone. Days before I deployed, I got fed up and found the corporate office fax number, faxed the required paperwork and a letter that stated I will never again use, nor will I ever recommend, Sprint to another person in good faith and the reasons why. Haven't heard back from them after that.
 
C

chuck10553

Junior Audioholic
that seems ridiculous... termination fees (as much as we all hate them) are totally lagit... someone enters into a legal binding contract and if they want to terminate their contract then there should be a penelty... otherwise how would the cell phone companies make any money if they have people switching carriers all the time... and thats how they can give great deals on phones is because they know that the people will be with them for 2 years or so... personally i just stay with my cell phone company until they annoy me and let them know that at the end of my contract im done... usually they will do whatever they can to keep you ;)
 
j_garcia

j_garcia

Audioholic Jedi
$240 for terminating a contract that I am PAYING FOR? How is that legit? Don't tell me that what they charge me doesn't cover their costs for my use on a monthly basis. I have been with the same company for 10yrs, but I did have a problem with the contract early on due to a shady "authorized dealer" who flat out lied about the contract options.
 
aberkowitz

aberkowitz

Audioholic Field Marshall
$240 for terminating a contract that I am PAYING FOR? How is that legit? Don't tell me that what they charge me doesn't cover their costs for my use on a monthly basis. I have been with the same company for 10yrs, but I did have a problem with the contract early on due to a shady "authorized dealer" who flat out lied about the contract options.
Prove that it's not legit... or more importantly, show me how it's illegal. This is clearly a case of another California judge going off the deep end (the 9th circuit court of appeals is the most overturned court in the world!). I haven't been able to find the text of the ruling online to see how the judge defended the ruling, but it's definitely not illegal to have an early termination fee on a contract. They are ubiquitous throughout the world of business- both commericial and consumer- and if you claim that it is illegal to have them on cell phone contracts then how can they be legal elsewhere?

It would be great if the cell phone companies switched to the prorated model, but I don't see what incentive they have. There are a limited number of cellular providers in this country and new competition is virtually impossible (I think the top 3 companies combined have 60+% market share)- they have no reason to drop the fees.
 
M

markw

Audioholic Overlord
Spring plunked my magic twanger, too.

I attempted to use the military deployment clause to end my contract with Sprint. They made it as difficult as humanly possible for me to submit the paperwork to the proper people. Apparently you have to fax it to an out of state location; you can't do it in store or over the phone. Days before I deployed, I got fed up and found the corporate office fax number, faxed the required paperwork and a letter that stated I will never again use, nor will I ever recommend, Sprint to another person in good faith and the reasons why. Haven't heard back from them after that.
I had Sprint from 1998 to 2004. I started out with a two year contract and had my soriginal phone, a Sony Z-1000. My wife got hers in 2001 and I added her to my bill for the additional $10.00/month and that commitment expired in 2003.

When her phone died in late 2004 (two years after the contract expired) I wentto purchase a replacement. I had no problem renewing for another two years but their rep out-and-out lied to me about purchasing a replacement phone for my wife.

My wife wanted a particular phone that had a list price of $280 or so. The rep said that if we renewed the contract we could get it for $50 or so. We said go for it and they shipped the phone.

When I went to activate it, they told me this was for a new number. I said this was supposed to be used on an existing one. This rep said no problem and activated it to my wife's existing number. So far, so good.

About two weeks later I got my Sprint bill and found they banged me for $280for that phone. When I called their customer service, I was basically told tough s**t, that's the way it works. They don't offer replacement phones when renewilg a contract. They didn't care that their rep told me something different. They also acknowledged that since we're still using the existing number, we didn't have a contract with them, either, and could return the phone for credit.

That night, Cingular/ATT had two new customers and in spite of what I've read, I've had zero problems with them, either with reception or billing.

I was, however, able to return the phone to them by prepaid registered mail using materials supplied by their local store. They would up owing us a few dollars which I made damn sure they paid me. (it pays to be anal with my personal bookkeeping)

About two weeks later I got some strange message on my home answering machine from Sprint customer service apologizing profusly for the mixup and asked how they could get us back as a customer. I didn't bother responding.

This was just about four years ago. After the first two years were up, Cingular lets us renew our contracts when they are up and get phones for the same prices they charge for new activations. We're due to upgrade our phones later this year but, to be honest, we like our Motorola razr V3's and just may ride it without a contract. It's nice to know that we can avail ourselves of the replacement/upgrade at any time, though.

...that's something Sprint ought to think about. That would have resolved my problem before it even started.
 
j_garcia

j_garcia

Audioholic Jedi
I didn't say it was illegal, I said it was bull. I don't have any other services that stipulate that I would have to pay for any kind of termination.

About two weeks later I got my Sprint bill and found they banged me for $280for that phone. When I called their customer service, I was basically told tough s**t, that's the way it works. They don't offer replacement phones when renewilg a contract. They didn't care that their rep told me something different. They also acknowledged that since we're still using the existing number, we didn't have a contract with them, either, and could return the phone for credit.
That is basically the same thing that happened to me and because Verizon said they are only a licensed dealer, they are not an actual Verizon Wireless store, that they were not responsible for whatever the guy in the store told me.
 
B

Buckeye_Nut

Audioholic Field Marshall
1. Adult who is personally responsible & accountable for his/her own actions/personal choices...
or
2. irresponsible whiner who does not accept personal responsibility for own actions?

Which are you?
 
Last edited:
M

markw

Audioholic Overlord
huh?

1. Adult who is personally responsible & accountable for his/her own actions/personal choices...
or
2. irresponsible whiner who does not accept personal responsibility for own actions?

Which are you?
To whom is this dircted, and why?
 

Latest posts

newsletter

  • RBHsound.com
  • BlueJeansCable.com
  • SVS Sound Subwoofers
  • Experience the Martin Logan Montis
Top