Cell Phone Companies Continue Getting Penalized for Early Termination Fees

Cell phone customers are continuing their battles against individual cell phone providers who charge exorbitant amounts for early termination fees, according to the Mercury News. There are numerous lawsuits currently going on and being filed all around the United States. In this latest lawsuit, Californians in the Bay Area won a suit filed against the Sprint Nextel company.

In addition to Sprint Nextel having to pay former customers an $18.2 million settlement, the judge in the case ruled that Sprint’s early cancellation fees were a violation of California state law.

The Mercury News goes on to admit that the case may be appealed – in fact, the chances of that are entirely likely. All the same, the fact that these pricey fees were declared illegal will undoubtedly have an affect on similar lawsuits already taking place, not to mention all of those which may be filed in the future.

In addition to the settlement and the ruling about the legality – or lack thereof – of these fees, the judge in question also told Sprint Nextel in no uncertain terms that the company needs to quit attempting to get payment from any customers who yet to pay the fees they were charged for cancelling their contracts early. Up to this point, Sprint Nextel was trying to get $54.7 million out of former wireless customers.

Not only is an appeal a huge possibility, but there is some question about whether the judge’s ruling will stand at all. The Federal Communications Commission, says the Mercury News, is thinking about enacting a rule which says that early termination charges can only be regulated by federal authorities. There is really no question that such a decree would be firmly backed by the wireless industry as a whole. This begs the question about how the FCC intends to help unhappy consumers.

The sheer volume of similar lawsuits taking place clearly suggests that the problem is becoming very widespread.

The good news is that a lot of people believe that, should the FCC announce such a decree, it will be overturned. Something needs to happen. Even those not involved in this particular lawsuit – or any other suit associated with termination fees – are thrilled with the results. Given the fact that the government is not subjected to early termination fees, it does seem like allowing states to have a say in regulations would be fairer to consumers.

(July 23, 2008)