RSSVerizon Wireless settles its early termination fee suits
By Ed Oswald | Published July 10, 2008, 12:12 PM
The carrier has sued by several consumers nationwide over its early termination fees. While VZW admits no wrongdoing, this week's payout settles those cases.
A total of $21 million would be split among the plaintiffs and cover attorney's fees. In addition, it would cap the amount that Verizon Wireless would have to pay to settle individual early termination fee (ETF) claims.
US Federal Communications Commission officials held hearings in June on the subject after receiving thousands of complaints. Chairman Kevin Martin proposed several changes, including variable ETF fees based on handset cost, prorated penalties, and the banning of extensions if a contract is renewed.
The agency is still discussing Chairman Martin's proposal, and it did not comment on the VZW decision. It was not immediately clear whether the needed majority of commissioners would support the chairman in order to move his ideas forward.
In its own testimony at the June hearing, VZW appeared to support efforts to reform the system which seems to be furthered by its moves to settle with complainants here. It also said the suits were a distraction, and the cash settlement was a quick way to resolve it.
Sprint Nextel may be the next to settle, as it is awaiting a decision in California over its own ETF suit. Verizon Wireless' apparent desire to settle quickly, coupled with the fact that both these companies have stood in front of the same judge in one case already, may indicate that there is little confidence in a positive judgment for the wireless industry.
However, Sprint seems confident in its position, noting that a jury had found that the company had lost three times as much as it had forced users to pay in ETFs, rendering a cash settlement, in its opinion, unlikely.
The whole way the U.S. wireless market works is a pain.
You can say that everything is out in the open but how many have made a change to their services and not be clearly notified that they had a new contract?
Some customers abuse things and others just don't know. It's a shame that it can just be straightforward but then, it wouldn't be customary U.S. business then, would it?
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tpaman1975 -- The suit was also regarding extending or the unfair termination fees even if VZW changes their prices and policies.
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Verizon settled because it doesn't want to deal with this crap and the upcoming merger. It's easier just to pay to shut up the whiny user.
Honestly if they would have fought it they probably would have won. All wireless contracts notify users of early termination fees if they opt to leave. You signed for it, you agree to it.
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