The ubiquitous early termination fee. It’s a fact of life in the US wireless world. In return for significant handset subsidies, carriers levy ETFs against customers that terminate their contract early in order to guarantee that costs can be recouped. But, just because ETFs help keep handset prices down in the US, doesn’t mean people are any more receptive to paying
upwards of $175 (or more) to get out from under that 2-year contract before it expires.
To that end, a California court has found Sprint’s early termination fees unlawful. The judge ordered Sprint refund $75 million to its contract-canceling former customers.
The ruling requires Sprint to pay $18.2 million in cash to those customers that actually paid off Sprint on their ETF fees, the remaining $54.7 million will be credited to customers who were charged the ETF but did not yet pay.
“This ruling sounds the death knell for the industry’s petition seeking a preemption ruling from the FCC – a ruling the industry has never been able to win in court,” said Scott Bursor, an attorney representing the plaintiffs.
Still, Sprint isn’t ceding the lawsuit to the plaintiffs just yet. The No. 3 US wireless carrier has two weeks to respond to the ruling. “We’re reviewing the ruling,” said
Fellow ETF lawsuit defendant, Verizon, decided to avoid the kinds of hefty reimbursement fines that Sprint is now facing by agreeing to settle the case early on.
[Via: AP]