Friday, August 1, 2008

Cell Phone Early Termination Fees May Be Illegal

A California court has recently tentatively ruled that Sprint's early termination fees charged to consumers cancelling their cell phone contracts prior to maturity are illegal. The ruling would require Sprint to return some 18 million to consumers affected and cease collection efforts on about 54 million in outstanding fees. This is the first such ruling among dozens of early termination fee cases around the country. Rather than face an adverse ruling, Verizon recently settled a similar case.

One large issue is whether or not California law is applicable to such charges. Some argue that these charges are actually telephone rates that fall under the purview of federal law and the FCC. It is hard to buy that argument though, as early termination fees are not connected to cell phone service but rather a penalty provision that is a creature of contract.

In any event, if you question early termination fees or illicit cell phone charges, you should contact a class action attorney for information about your rights.

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