Early termination fees for cell phone contracts illegal?

[Wes]

VERY interesting read.

http://tech.yahoo.com/blogs/null/99655

[wattsbw2004]

hopefully it doesn't happen because i very much don't mind the low prices of cell phones that come with those contracts. I like paying $200 for a blackberry compared to $600.

[Thorpeland]

Its a tough call. I can't see the ruling standing up through the appeal process. But it would be nice to not have those cancel fee's. I don't like being locked in. Granted it does give us cheaper hardware. I did like the suggestion that the cancel fee gets less as you near the end of your contract.

[ST77]

Originally Posted by wattsbw2004

hopefully it doesn't happen because i very much don't mind the low prices of cell phones that come with those contracts. I like paying $200 for a blackberry compared to $600.

I totally agree.


People need to start taking responsibility for what they do. You entered into the contract, you said you would pay $xx.xx a month for xx months and they gave your either a free phone or a greatly reduced price phone. Why should you be able to just walk away free and clear with the phone and take it to one of those companies that say "we unlock any phone" "pay as you go"

[JohnT]

California. 'Nuf said.

[SCone]

On June 12, a jury in the Alameda County lawsuit ruled in favor of Sprint Nextel, determining that its customers who canceled their service early had breached their contracts with the company and that early termination fees were warranted.

But in overruling that decision, Sabraw said the jurors appear to have erred in assuming the fees were valid, and she took issue with the way Sprint Nextel determined that its customers owed the fees.

[groovyone]

I don't get why they'd over rule it. You signed a contract and probably saved a few hundred on the phone. If they can't charge the fee, than the phone buyer should have to give back the discounted money on the phone.

[ST77]

The judge is probley up for reelection and knows they are far more ticked off "former sprint customer voters" than voting sprint executives.

[LanceHaynie]

Originally Posted by JohnT

California. 'Nuf said.

Ditto, I wouldn't survive in Cali

[Bella]

The truth is, most wireless companies treat their current customers with a great deal of disdain . .. I've been with Sprint for over 10 years( my dad was a vp with them for several years), and yet when my last phone died, I couldn't get a deal on a phone that was as good as new customers could get. I would have terminated my contract with them right there had it not been for the $525 termination fee (3 lines). For now, I'm biding my time til the end of Sept when the contract is up.

I don't mind the phone companies subsidizing the cost of the hardware, but I'd like to be given a choice as to if/how long I'm tied to a company. If shorter contracts mean higher prices, so be it.

-Cindy

[LanceHaynie]

Originally Posted by Bella

The truth is, most wireless companies treat their current customers with a great deal of disdain . .. I've been with Sprint for over 10 years( my dad was a vp with them for several years), and yet when my last phone died, I couldn't get a deal on a phone that was as good as new customers could get. I would have terminated my contract with them right there had it not been for the $525 termination fee (3 lines). For now, I'm biding my time til the end of Sept when the contract is up.

I don't mind the phone companies subsidizing the cost of the hardware, but I'd like to be given a choice as to if/how long I'm tied to a company. If shorter contracts mean higher prices, so be it.

-Cindy

I think it really varies from company to company though honestly. My mother had a HORRIBLE relationship with AT&T when they went to Cingular. But me on the other hand have been with T-Mobile 4 years now and they have treated me like im some sort of VIP (no joke).

My first phone with them was the Treo 600, I dropped it less than a week and crushed the screen ($500 phone with no "discounts) they overnighted me a new one. By 9am the next morning I had the new phone, and that was at no cost to me.

More recently, I went over my plan by roughly 100 minutes, I called to see how many minutes I had gone over, and they offered to retroactively change my plan so that I would have no overage what so ever. Also, he noticed I am paying for both data and wifi separately, he set me up on a plan that covers both for the same price as one.

Needless to say I am very happy with my provider, point being to the original comment, they are perfectly in their right to charge the fees. You signed a contract, I have the ability to sign 1 or 2 year contracts. If you do not like contracts their are other providers that do not require that, or you can go pre paid.

[Duffy Pratt]

Well, since the article says absolutely nothing about the legal basis for the ruling, its kind of hard to come to any conclusion about whether or not the Court got it right. I don't even know what sort of law the cancellation fee violated.

Duffy

[Cope]

I don't see the problem, if you agree to the terms when you get the great deal on a new phone/package, how can you feel it was illegal later?

I have had the same phone number since April of 1990, with Houston Cellular, Cingular Wireless and now AT&T. I hear horror stories with all of the carriers, bout they must be doing something right, or they would fold.

[Duffy Pratt]

In most states, a liquidated damages clause in a contract will only be enforceable if it is a reasonable approximation by the parties as to what the actual damages would have been. A few years back, Blockbuster got hit on this same thing for its late fees. The fees it was charging for returning a video late were more per day than the rental costs. Thus, there was no way that the late fees were a reasonable approximation of Blockbuster's damages, and the case was a pretty clear slam dunk. So, its not always just what the people agree to. The trouble with this reporting is that it gives no idea why there was a legal problem with the early cancellation fees.

Duffy

[Wes]

Originally Posted by ST77

People need to start taking responsibility for what they do. You entered into the contract, you said you would pay $xx.xx a month for xx months and they gave your either a free phone or a greatly reduced price phone. Why should you be able to just walk away free and clear with the phone and take it to one of those companies that say "we unlock any phone" "pay as you go"

What if your service was terrible? What if, after you sign the contract, you find out that most of the people you talk to really can't "hear you now"?

I agree with your thoughts about personal responsibility, but I also think that the consumer needs to have options when the carrier doesn't live up to their end of the bargain.