Cell Phone Termination Fees: States Consider Consumer Protection

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Los Angeles, CAThe California State Senate will vote on legislation designed to protect cell phone users in California from early cell phone termination fees and other fraudulent cell phone industry practices. California is one of a number of states that are starting to take action against cell phone companies and their abusive practices.

The legislation would give cell phone users 30 days from signing their contract or ten days after receiving their first bill -- whichever is later -- to cancel their contract without paying termination fees. Furthermore, the legislation would make termination fees prorated so that customers who cancel their contracts later in the life of the contract would pay a smaller fee than those who cancel it early. Finally, the legislation would give customers the ability to cancel their contract with no fees if the phone company raises the contract rates during the life of the contract.

cell phone consumer protectionIn Illinois a cell phone "lemon law" will now go before state Senate after passing the Illinois House. The legislation would allow people who receive three bad phones the right to cancel their contract with no termination fees.

Meanwhile an Arizona Senate panel voted earlier this year to give consumers the right to cancel their cell phone contracts with no termination fees if their cell phone carrier misrepresents the coverage area or gives the customer a phone with a history of problems and does not replace the phone.

Also earlier this year, a Rhode Island Representative proposed legislation that would prohibit cell phone companies from charging customers penalties or fees for canceling their cell phone contract. "The early termination fee has been established by the cell companies as a means to prevent customers from switching to another carrier," Representative John J. DeSimone said. "In that respect, I consider it an unfair trade practice."

Cell phone early termination fees not only cost consumers money, they prevent consumers from switching to new carriers if their service is poor. In August 2005, the Massachusetts Public Interest Research Group released a national poll, which showed that 47% of consumers "would have or would have considered switching service if not for the contract termination charge. In addition [MASSPIRG] found that the early termination charges cost cell phone consumers $4.6 billion from 2002-2004 (cost to consumers who switched plus potential and lost savings).

Some customers, fed up with poor treatment by their cell phone companies, have taken matters into their own hands and filed lawsuits against the phone carriers. Last year, a class action lawsuit was filed against Sprint Nextel and Verizon Wireless, alleging the companies charge ridiculous early termination fees. Attorneys in the lawsuit argue that the fees are higher than what is "necessary to compensate the carriers for their investment in the lost customer."

If you cancelled your cell phone contract early you may be eligible to recover fees you paid to cancel the contract, especially if the contract was cancelled because your carrier misrepresented its service area or provided poor cell phone service. Contact a lawyer to discuss your options.

Cell Phone Companies Legal Help

If you have been charged undisclosed termination fees, please contact a [Cell Phone Companies Lawyer] who will review your case at no cost or obligation.

Reader Comments

Posted by

T-Mobile a bunch of crooks I called them and they told me everything will be waived since my mothers passing. To send in death cert and copy of bill. I looked it up on line all the problems people have when a loved one passes. So T-Mobile a bunch of liars I sent all paper work in certified with return receipt also emailed them with copies of death cert and copy of bill. No luck they said it was denied and I still owed the money and I might still be getting a bill I did record call from the lady I was speaking to and told her again Im only authorizing the amount of $139.67 nothing more I told her again this phone call is being recorded she said ok than she tells me I will get the last bill in a month what kind of Sh*t is that. Never again just like Att & Dish they all want contracts and stick you even when the person whom had contract has passed away never again and anybody whom reads this we need to stop paying into the company so they can go bankrupt that is what they need

Posted by

How is it that ATT can charge Fed. Univ. Service charges and Illiois State Telecommunications Tax of 13% on the ETF. I can't see where they can tax on a penalty fee. I could understand better if they were charging sales tax on the amount because it is supposed to represent the discounted price I received on the phone at beginning of contract.

Posted by

At & T has deceptive billing methods. Every time I turn around they are trying to shove some hidden charges onto my account. just discovered ive been being charged for 11 months for a gamesport application $3.26/mo and roadside service $2.99.......i dont play games and nobody else touches my phone. i have roadside service with my ins company and my warranty.... also their bills are impossible to understand and they have what they call "government" mandated charges. then there are the surcharges and access fees. transaction fees, state fees....

I'm switching to a prepaid service as soon as i can find one. im so done with at & t

Posted by

I moved from CO Springs CO to Yuma CO 3 years ago. I specifically went to AT&T to ask if I would be allowed to maintain my cell phone service or would it be necessary for me to switch carriers. I was told there was no problem with maintaining my service. Since then I have been to a phone store to upgrade my phone, buy accessories & to replace a lost phone with no mention of my need to switch carriers.

Today I received a letter from AT&T stating that it is no one's fault but my usage is contrary to my rate plan & I must act to reduce my usage of other carrier networks or risk being terminated. I was told by an AT&T Customer Service Representative that I am in violation of my contract & it is cheaper for the company to terminate my service or to allow me out of my contract than to continue to allow me to use my cell phone as I always have.

Although the letter states that they regularly review customer accounts, I have been living out of my previous network area for 3 years. How many other AT&T customers are experiencing this & why is AT&T allowed to boast in their advertisements that they have the largest network areas. Clearly they are in the wrong but they'll be allowed to continue their practices if no one ever steps up to the plate to stop them.

Posted by

Tmobile is a legitmate robbery. How a cell phone company is ALLOWED to turn my cell phone service off over 14.34$ unpaid balance, AND THEN. CHARGE ME $20.00 to turn my phone on???!! (Or as tmobile LIES and terms it a "suspension fee" that I will get charged next month). TMOBILE TURNED MY SERVICE OFF NOT ME. I DIDN'T ASK TO TURN IT OFF. HOWEVER I would LOVE TO PERMENTALY end my service with tmobile; strangely, when I WANT TO END THE SERVICE I would get charged a $200.00 termination fee. The customer support WAS NO HELP. Recently tmobile has become a HORRIBLE CARRIER. I hope the federal consumer looks into these fraudulant, contracts that should be considered MORALLY HEINOUS. Tmobile changed their policies in July 2011 (although they made no attempt to personally advise me of this change) and since then its been all downhill.

THIS IS A NATIONAL, ROBBERY OF AMERICAN TAX PAYERS, AND AMERICAN PEOPLE. We need to file a lawsuit. Why do those who pay taxes most, suffer the most??

Tmobile was a good company about 2 yrs ago...recently, they've changed their tactics and are baring a disgustingly similarity to Sprint (I had sprint yrs ago).

Posted by

I am been charge a termination fee of $400 plus collection fee for a contract I cancelled after 4 years of service with T-Mobile; due to poor coverage.T-mobile renewed my contract without advising me that my contract would be renewed. I had no choice but to get two new phone, because (one) was so old it wasn't working and the (other) because it was damage. I try Negoiating with the collection agency for my balance of $400+ collections fees but they wanted me to paid the balance in 2 payments which I cannot afford, so they stated they were sending me to collection and were referring the balance to an attorney so that they can get a judgement against me. Please help!

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