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Verizon soon to face the biggest class action lawsuit yet

By Tim Conneally, BetaNews

January 29, 2008, 2:29 PM

Yesterday, a class action suit four years in the making was certified against Verizon Wireless over the company's unfair early termination fees.

A trial date has not yet been set, but Eugene I. Farber, the senior arbitrator/mediator for the American Arbitration Association in White Plains, NY, has certified the 70 million former Verizon Wireless subscribers as a class entitled to engage in litigation against the cellular provider.

Farber said in his 35-page statement that "as a matter of equity and fairness," claimants are allowed to act as a class disputing the $175 early termination fee they were imposed by VZW on the grounds that it is based upon an unenforceable liquidated damage clause. Liquidated damage clauses are meant to be a fair compensation for money lost through a breach of contract, where the loss is difficult to quantify.

This group now stands as the biggest class yet certified in arbitration, and the biggest class ever certified on a contested motion in forum, litigation, or arbitration of any kind. The payout could reach as high as one billion dollars.

Since 2006, Verizon has offered its early termination fees prorated.

Another class action suit in the mobile realm was recently settled by handset maker Palm. That company agreed to provide a cash rebate of $50 to purchasers of the Treo 650, and $75 for the Treo 600, both of which required numerous repairs and replacements due to freezes and unintentional restarts.

Those unfortunate users who terminated their contracts with Verizon due to a constantly malfunctioning Treo 600 may finally be receiving some money in recompense, and each stand to get as much as $250 from these combined suits.

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By alysa

edited Jan 31, 2008 - 1:31 AM

This bull$hit only happens in US. In many countries there are no termination fees.
I am especially pissed off with ATT - cause when you buy iPhone - you have to sign stupid contract - but that contract does not give any advantage - cause iPhone cost same with contract or without.
So they are just trying to put customer in wireless "jail". That is definitely not a fair practice...

Score: 0

By cranbers

posted Jan 30, 2008 - 11:14 PM

You lose your phone and you have 30 days left on your 2 year agreement.

What are your options before the prorated termination fee of 175?

1. buy a new phone at the full purchase price, say 300 dollars for your basic phone.
2. Pay 175 dollars.
3. go without phone and continue paying the service that you will get nothing out of till your contract is up.

Gee I wonder why there are so many pissed off people.

At least now they prorate it, why verizon is the only one under the gun. I had to pay Sprint a 125 dollar termination fee and I only had a few months left on my contract. I wonder how much they make on those anyway.

Score: 0

By skimore

posted Jan 30, 2008 - 5:35 PM

This is understandable if you got a malfuctioning Treo.. Or razr. I went though 4 before one worked longer then a month.

How about a Class action suit against all the Cable/Satelite companies.. since the networks are giving rebates because of the writers strike and they are not passing it back..

Score: 0

By Poof

posted Jan 30, 2008 - 11:13 AM

The headline on this article should really say "Verizon Wireless soon to face..." considering they're two different companies...

I only say this because when I first read the headline, I was wondering if this was about their DSL/FIOS/Landline/VOIP service...

Score: 0

By Bobbitchin

edited Jan 30, 2008 - 10:39 AM

I know you want that sweet new phone so bad, and it's FREE!!! Can't go wrong with FREE now can you? They are practically PAYING YOU to use this cool phone!

Read the contract and ask questions before you sign.

Personally I only use prepaid service. No contract no termination fee's, no bull$hit.

Score: 0

By slowgu

posted Jan 30, 2008 - 2:34 AM

I find it amazing that it is allowed that a company forces your to pay a fee up front for usage of their service (i.e. connection fee), and then punishes you (i.e. early termination fee) for discontinuance of their service.
This policy would be akin to a doctor charging you before you visited him, and then, if you got better, charging you an extra amount because you got better before he anticipated, or went to another doctor for better service.

Score: 0

By Paul Skinner

posted Jan 30, 2008 - 7:15 AM

It's a contract.
If you terminate that contract early there is a fee to pay.

That's that.

However, if the other party (in this case Verizon) don't uphold their end of the deal you have a case for not having to pay the fee.

Doctors don't give you a contract so that's a bad example.

Score: 0

By xyzcb1

edited Jan 30, 2008 - 10:01 AM

Here is the problem, they use word like "up to". For example, in their DSL, the message say "up to 3mpbs". So they can be serving you with 128kpbs and it still within the contract agreement.

I know, because it happened to me, there was a period were Verizon DSL was running really slow during the evening. Pings were really high, like 400+. I called up the technical rep, and go through their reset modem, reset computer drill. Then call up their customer rep and asked them why am I being charge for 3mpbs, when I don't even get 1/10 of the advertising speed, and she basically responded with "we only promise UP TO ..."

Like I mentioned in my previous posts, I am glad someone take some action on them. I hate most class action, but this one is the exception.

Score: 0

By bousozoku

posted Jan 29, 2008 - 9:43 PM

I hope reasonable compensation can be awarded.

It amazes me that these companies are still trying to push their customers as other companies did in the 1970s. Thank goodness with have a little choice with the wireless providers.

Score: 0

By andrey

edited Jan 30, 2008 - 1:48 AM

Actually I hope fees won't be awarded.

The fact of reality is that money that potentially can be awarded won't come from nowhere. These money will come from VZW customers who will end up paying higher monthly fees to compensate for ridiculous class action suits like this.

Further, in the long run, other companies will raise their fees as well under the general industry practice "if one company can charge higher prices, we can too".

These class actions suits are not good for the industry and especially for customers who will end up paying the higher price at the end. Only people who really profit from this are lawyers who are so eager to be part of the class action.

Score: 0

By DonGato

posted Jan 29, 2008 - 8:48 PM

Phone companies should be put to some strain as they do every day with their customers with bad service, extra costs that are not specifically stated on the contract and more. Of course you can challenge all that but what about the time you spend doing so? Your time isn't worth a dime?

They should understand that their time is as expensive as the one of their customers.

Fair treatment for both I say. You have an issue and it's determined it's their fault, then they pay a fee for the time you spent in handling it.

Score: 0

By Sven123456789

posted Jan 29, 2008 - 8:20 PM

All the cell carriers have this bs. Wonder how this will go forward against them also.

Score: 0

By Hellcat_M

posted Jan 29, 2008 - 8:09 PM

I heard the horror stories of Verizon. I have never been with nor will I ever go with Verizon unless they change their business practices. I hope they loose and I hope they loose big, maybe that will make them change their ways.

I think these contract termination contracts need to be changed. They should say if you don't get good service or if you have problems with X amount of phones then you can terminate without fee. I'm with Sprint and have had my problems and they blame the problem on everything but their service. Its my house, they don't promise service indoors, you have a tree in front of your house. I say other friends with other services come to my house and get good signal and they basically say "so what".

These companies who don't care about their customers, we're just money to them, they can kiss my ass. Where did pride in good service go? Where did good customer service go? Down the toilet..and thats a sad thing.

Score: 0

By TomA102210

edited Jan 29, 2008 - 8:56 PM

By Hellcat_M said:

"I heard the horror stories of Verizon. I have never been with nor will I ever go with Verizon unless they change their business practices. I hope they loose and I hope they loose big, maybe that will make them change their ways."
---------------------------------------------
I have been with Verizon Wireless for a little over 5 years and my contact with them, both in their stores and on the phone with customer service has always been first rate. Prior to Verizon I was with Sprint and the old AT&T. Their customer service left much to be desired along with the availability of service in certain areas of the country. Since I've been with Verizon Wireless it has been a rare occasion when I get in to an area where service is not available.

Score: 0

By Hellcat_M

posted Jan 29, 2008 - 10:13 PM

Do you live on the west or east coast? I have a friend who had Verizon for a couple days until she was roaming inside her house and Verizon was charging her for roaming. She got rid of the account but had to fight to get the roaming charges taken off her bill. I live in Los Angeles and I've known people with Verizon that get dripped like crazy.

Every phone company has their problems, you just have to go with the one thats best in your area and where you travel. The best way to fix this would be if we had one technology and all the phone companies just made the best overall network they can. This way people can pick one over another because of a certain service they provide that another doesn't instead of which company says its better. Its kind of a crap shoot. I had Pacbell and left them because where I moved got bad signal and now I'm going to leave sprint because where I moved to now has bad signal. This should not be and its pretty sad.

Score: 0

By TomA102210

posted Jan 30, 2008 - 10:00 AM

Hellcat_M said:

Do you live on the west or east coast? I have a friend who had Verizon for a couple days until she was roaming inside her house and Verizon was charging her for roaming. She got rid of the account but had to fight to get the roaming charges taken off her bill. I live in Los Angeles and I've known people with Verizon that get dripped like crazy.
-----------------------------------------
I live on the West coast. Not just Verizon, but other cell phone companies have always made it clear that one will pay for roaming. The three I've had (AT&T, Sprint, and now, Verizon)made that clear. If I'm not sure of something I might get expensed for I call the provider, no matter what the service. Verizon is best for my area and so far it has been all along the west coast. I agree, all phone companies have their problems.

Score: 0

By Hellcat_M

posted Jan 30, 2008 - 1:41 PM

I don't pay for roaming with Sprint. For a while I just kept my phone on roaming because I kept getting dropped calls.

Score: 0

By franzj

posted Jan 29, 2008 - 6:13 PM

I accidentally terminated my contract 1 day before the end-date, and Verizon automatically charged me the $175 early termination fee. I visited a Verizon store, and was required to call customer service from the store to request the refund. I explained to the customer service person that the $175 fee would prevent my return to Verizon, and he refunded it to me. I am very upset to this day that Verizon tried to pull a fast one on me; and I am upset that the refund was at the customer service person's discretion.

Score: 0

By andrey

edited Jan 29, 2008 - 7:15 PM

$175 is accessed automatically if you cancel your contract before the end date. Why couldn't you wait one more day to avoid troubles? You're upset because VZW follows their policy? Wow!

Score: 0

By wav

posted Jan 29, 2008 - 7:33 PM

Not to mention the "automated" side of the policy. The system reads date to date, if less than #years/days then ::affix ETF::, else, ::darnit, we lost another one::, not a person.

You ASK for a review and a refund and they obliged ... What more can you ask for? AI to interpret your intention to wait but accidentally didn't? Or do you expect them to review every single cancellation personally to determine if one person should be waived over a day over another person terminating a week prior because they were superb on time payers.. ;]

Score: 0

By Tracker____

posted Jan 29, 2008 - 4:42 PM

For two years I was an owner of a Verizon phone from 2002-2004. When I closed my account I had to pay the $175.00. This was one day after my contract Died. They also tried to nail me for searching/roaming charges from the Bahamas. My contract read that there were no "Roaming Charges". I took the contract to them and they removed the charges. I truly hope something is done.

Score: 0

By billweh

posted Jan 29, 2008 - 5:57 PM

If your contract died (I'm assuming that you kept service for the entire length of the contract you signed), then why would they have charged you to terminate. Your obligation was complete. If you're phone died, that's another story and it's covered in the contract.

I don't get these lawsuits. When you decide to go with a carrier, you get a contract - the contract clearly states what fees will be assessed if you leave their service prior to your contract end date. It's the same with just about every subscription based system where you don't pay for it up front.

If you don't like the contract - then don't sign it. If you signed it, then you are obligated to fullfill your part of the bargain, just as they are obligated to fullfill theirs.

No one forces us to sign with a carrier - no one forces us to get a cell phone. This to me is another example of the whiny generation who feels they are entitled to everything and can do as they please without regard.

I hope that the judges who finally get this have a brain in their head and say - next time - RTFC.

As Bill Engvall says "Here's your sign!"

Score: 0

By Mikee4fun

edited Jan 29, 2008 - 10:46 PM

What makes this typical bs class action lawsuit a joke is Verizon does not make the phone Palm does. Verizon is a reseller. The lawsuit should be pointed at Palm not Verizon. Now for all you cry babies going oh Verizon customer service is so bad. Waa cry me a river. When I had service with Verizon I had an Apache with them and it broke. Went to customer service and talked to the manager and they replaced it. It is jack as....liberals who go in there demanding the world and you libs will never get good service spitting on a csr. All phone carriers seem to have bad service agents from time to time. If you are looking for the best customer service, not coverage look to T mobile. They have always jumped through hoops for me. By the way I am a Sprint and TMO customer. Flame ON!

Score: 0

By preinterpost

posted Jan 30, 2008 - 7:48 AM

What you have to understand is that in the US more than anywhere else the carriers dictate precise features to phone makers. That's why the same model is a whole lot s***tier in this market than anywhere else. But don't worry - they'll pass the buck to Palm if money is to be paid...

Score: 0

By kashin

posted Jan 29, 2008 - 7:39 PM

"I don't get these lawsuits. When you decide to go with a carrier, you get a contract - the contract clearly states what fees will be assessed if you leave their service prior to your contract end date. It's the same with just about every subscription based system where you don't pay for it up front."

I suggest you try reading the whole article next time, rather than just the headline. The lawsuit is related to faulty models of cell phones. Both Verizon (provider of the service) and Palm (provider of the phones) are being sued. What are you supposed to do when you've already signed a contract and you're given a phone that doesn't work properly? Would you keep paying the monthly fee because you got screwed by not one, but two different companies? One gives you a phone that doesn't work, and the other provides a service you can't use or get out of. Also, the $175 termination fee was unfair. Is it okay for a company to cheat you out of X amount of money using a "contract" even if the early termination costs them a fraction of that X amount?

Score: 0

By andre.a

edited Jan 29, 2008 - 7:23 PM

@billweh,

I agree with your call to RTFC.

However, when writing the contract, a company has the choice to put a termination fee amount which covers their "loss," or use the fee as a loophole for increased profits. Which I think is the case with all subscription-based contracts I've seen (verizon, at&t, t-mobile).

So, if I am looking at a "standard" contract in a fairly monopolized industry and see that one of the clauses requires me to agree to what I see as an extraordinary high penalty for leaving such contract, I get suspicious.

Maybe Verizon will prove in court that $175 is indeed what they lose from each customer leaving early.

But maybe this amount could be adjusted every quarter? I wouldn't think they "lose" the same amount on day 1 as on day 730.

I actually think I am looking at a fat corporation pushing the limits of what it can get away with.

Cheers
-- Andre

Score: 0

By billweh

posted Jan 30, 2008 - 10:16 AM

Who cares if it costs Verizon $175 or $0.05? The contract states that if you terminate early - you will be assessed a fee of $175.

I'll say it again - if you don't like the contract - don't sign it. Would you buy a car and then decide you don't like it or it's not getting enough gas mileage so you can just return it to the dealer and owe nothing more? Of course not.

What if you were on the other side of that contract? You had a client sign a contract with you stating that you would charge them $xx / mo for so many months and that if they decide to cancel services - they owe you a fee of $50.

They decide to cancel a few months in for whatever reason and tell you that not only do they not need to pay you the remaining balance on the contract, but they also don't need to pay you the fee? Wonder how long it would take you to get to court?

It costs more money to gain a new customer than it does to maintain an existing customer. That $175 is probably a small portion of what it takes to gain a new customer for any provider. Regardless of why they lost the customer, the person leaving is in breach of contract. They're lucky that the carriers let them out of the contract in the first place. They could hold your feet to the fire and/or take you to court over it.

Score: 0

By lawyerboston

edited Jan 30, 2008 - 12:31 AM

I don't believe you have to enter any contract with the carriers. After your contract expires, you should be free to change carriers at any time or stay on a month to month agreement. The downside of not having a contract in place is that if the carrier increases their prices (not likely with the competition), you either pay up or shut off your phone.

Consumers usually sign a 1 or 2 year contract because they want a free or discounted phone, even if sometimes the free phone is after a mail in rebate that the provider somehow lost or can't find.

Pay full retail for the phone you want or buy a used or refurbished phone and get a number without any contract. With LNP you should be able to keep your number and switch until you find the right service for you.

Most carriers allow a 2 week or 30 day trial anyway to see if the phone will work in your home or 90% of the area you travel. I can't recall a carrier that claims you will be able to make or receive calls everywhere. It's wireless! It's not going to work everywhere.

I have had Sprint since it started and for the most part I'm happy with it-much better than 10 years ago. Their customer service sucks, but no one's going to be perfect.

I go in to the store with low expectations and I'm never disappointed. Instead, I'm amazed when I receive good service, which is infrequent.

Score: 0

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