At least in California. The good news is, if this holds, you won’t have to sign those long, interminable contracts. The bad news is that’s one reason why you get the free phone, or a less expensive one. Personally, I’d rather pay more money for the hardware and and free from a contract. This is far from over, but at least it’s being dealt with.
California judge rules early cell phone termination fees illegal
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…
Of course, the carriers aren’t going to take this lying down. Early termination fees are seen as critical to business, so carriers are expected to look for ways to reclassify the fees (such as by calling them “rates,” part of the arcane set of laws that covers the telecommunications industry). The industry is also pushing for the federal government to step in
The courts found through evidence that the average cost of the replacement phones came out to $14, so a $150 – $250 early termination fee breaks the well established contract law regarding this sort of penalty that’s not related to actual costs.
So California is ahead for allowing people to enter into marriage and exit out of contracts. Let’s see if the FCC doesn’t kill this one.