Cell phone users may get break on fees - KSWO 7News | Breaking News, Weather and Sports

Cell phone users may get break on fees

Washington_The government is quietly negotiating to help cell phone customers avoid expensive fees when they cancel contracts with wireless companies, The Associated Press has learned.

Cell phone companies routinely charge customers $175 or more for quitting their service early. Under a proposal to the Federal Communications Commission, the wireless industry would give consumers the opportunity to cancel service without any penalty for up to 30 days after they sign a cell phone contract or until 10 days after they receive their first bill.

The proposal also would cap such fees and reduce them month by month over the course of a contract based on how long customers have left, according to people familiar with the offer speaking on condition of anonymity because the FCC has not accepted it. The plan would not abolish cancellation fees entirely and would not refund such fees to anyone who paid them.

In exchange for the government's approval, the agreement would let cell phone companies off the hook in state courts where they are being sued for billions of dollars by angry customers. If approved by the FCC, the proposal also would take away the authority of states to regulate the charges, known as early termination fees.

Lawyers representing customers who are suing over the fees are strongly opposed.

"It's Christmas in May for the companies," said Pamela Gilbert, an attorney with Cuneo Gilbert & LaDuca, a Washington D.C.-based law firm working on one of the class action lawsuits against the industry. She said if the FCC agreed to the proposal, it would save cell phone companies hundreds of millions of dollars.

"The people left holding the bag are the millions of people who paid illegal ETFs (termination fees) and now will never get their money back," she said.

The nation's No. 2 wireless company, Verizon Wireless, offered the proposal to the FCC for its review after high-level meetings with senior FCC officials. It did so in consultation with other leading wireless companies, whose executives indicated they would not oppose its provisions, people familiar with the offer told the AP.

The FCC declined to comment.

Consumers who have paid such fees describe them as exorbitant.

"It's ridiculous," said Ric Causey of Allen, Texas, who paid $600 in termination fees to Sprint on contracts for three cell phones after he canceled service because of what he said was poor reception around Dallas.

"I understand the fine print, but I ended up paying $200 per phone just to switch service," Causey said. He complained to executives to no avail. "I never got any satisfaction," he said. "I figured I'd deal with it later, but I never got reimbursed."

Causey, a freelance video producer, said he never imagined refusing to pay the fees out of fear it would hurt his credit rating.

Wireless companies said the cancellation fees are necessary to recover the cost of cell phones, which they subsidize under long-term service contracts, and to defray their costs for signing up new customers. Consumer groups said the fees are unreasonable and intended to discourage customers from switching among providers.

The expensive fees have led to class-action lawsuits in several states and legislative proposals on Capitol Hill and in state legislatures around the country.

The industry's proposal would link cancellation fees to actual costs incurred by a wireless company, and it would require companies to prorate any fees over the course of the contract. Verizon Wireless currently reduces such fees but never below $60. Other major providers, including AT&T Inc., have announced plans to prorate fees.

The proposal also would prohibit a wireless company from imposing a termination fee on customers who change terms of their contract or end one contract period and begin another.

Verizon Wireless is a joint venture between Verizon Communications Inc. and the Vodafone Group PLC of Britain. Verizon Wireless, with about 66 million subscribers, is the second-largest wireless company behind AT&T Inc., with 70 million customers.

The wireless industry is increasingly worried about a series of long-running, class-action lawsuits in state courts. One lawsuit against Sprint Nextel is under way in California, and plaintiffs in a New York case in arbitration are seeking $1 billion in refunds.

Federal law prohibits states from regulating wireless rates but gives them authority over some terms and conditions under wireless contracts. The industry's Washington lobbying group, CTIA, previously asked the FCC to consider cancellation fees to be rates, which would preclude state governments and courts from any jurisdiction over them.

In September, Sens. Amy Klobuchar, D-Minn., and Jay Rockefeller, D-W.Va., introduced the "Cell Phone Consumer Empowerment Act," which would require prorated fees and a 30-day window for customers to exit a contract.

John Dunbar, AP Writer © 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
  • Local NewsNewsMore>>

  • US issues steep list of demands for nuclear treaty with Iran

    US issues steep list of demands for nuclear treaty with Iran

    Monday, May 21 2018 8:52 AM EDT2018-05-21 12:52:00 GMT
    Monday, May 21 2018 12:43 PM EDT2018-05-21 16:43:48 GMT
    fasfdafasfda

    Secretary of State Mike Pompeo is laying out the Trump administration's strategy for constraining Iran's nuclear program and opposing its other behavior in the region following President Donald Trump's withdrawal...

    Secretary of State Mike Pompeo is laying out the Trump administration's strategy for constraining Iran's nuclear program and opposing its other behavior in the region following President Donald Trump's withdrawal from the 2015 nuclear deal.

  • Divided Supreme Court rules for businesses over workers

    Divided Supreme Court rules for businesses over workers

    Monday, May 21 2018 10:21 AM EDT2018-05-21 14:21:59 GMT
    Monday, May 21 2018 12:43 PM EDT2018-05-21 16:43:39 GMT
    The justices ruled 5-4 Monday, with the court's conservative members in the majority, that businesses can force employees to individually use arbitration to resolve disputes. (Source: Supremecourt.gov)The justices ruled 5-4 Monday, with the court's conservative members in the majority, that businesses can force employees to individually use arbitration to resolve disputes. (Source: Supremecourt.gov)

    A new Supreme Court will allow employers to prohibit workers from banding together to complain about pay and conditions in the workplace.

    A new Supreme Court will allow employers to prohibit workers from banding together to complain about pay and conditions in the workplace.

  • School victims honored at Billboard Awards; Janet, BTS shine

    School victims honored at Billboard Awards; Janet, BTS shine

    Sunday, May 20 2018 10:51 AM EDT2018-05-20 14:51:24 GMT
    Monday, May 21 2018 12:42 PM EDT2018-05-21 16:42:36 GMT
    (AP Photos/Invision, File). FILE - In a May 7, 2018, file photo, Ariana Grande, left, attends The Metropolitan Museum of Art's Costume Institute benefit gala celebrating the opening of the Heavenly Bodies: Fashion and the Catholic Imagination exhibitio...(AP Photos/Invision, File). FILE - In a May 7, 2018, file photo, Ariana Grande, left, attends The Metropolitan Museum of Art's Costume Institute benefit gala celebrating the opening of the Heavenly Bodies: Fashion and the Catholic Imagination exhibitio...
    After celebrating her 52nd birthday and the 25th anniversary of her groundbreaking "janet.".
    After celebrating her 52nd birthday and the 25th anniversary of her groundbreaking "janet.".
Powered by Frankly
<div id="CDEV-footer"> <div class="top"> <div class="search-box"> <div class="wnSearchBox" id="WNSearchBox-bottom"><form method="get" onsubmit="return wnValidateSearchTerm(this,0)" action="/Global/searchresults.asp"><span>Can't Find Something? </span><input type="text" class="wnQueryText" name="qu" size="20" value="" placeholder="Search For It Here"><input type="submit" class="wnSubmit" value="Search"></form></div> </div> <div class="station-info"> <div class="logo"><img src="http://ftpcontent.worldnow.com/professionalservices/clients/raycom/kswo/2015/images/kswo-footer-logo.png" width="103" height="98" border="0" /></div> <div class="contact"> <div>1401 SE 60th Street<br>Lawton, OK 73501</div> <div>(580) 355-7000</div> </div> <div class="fcc"> <div><a href="https://publicfiles.fcc.gov/tv-profile/kswo-tv">FCC Public File</a></div> <a href="mailto:nbowers@kswo.com">nbowers@kswo.com</a> <div>(580) 355-7000</div> <a href="/link/759231/eeo-report">EEO Report</a> <a href="/story/30715922/closed-captioning">Closed Captioning</a> </div> </div> </div> <div class="footer-main-nav"> <ul class="link-group"> <!--<li><a href="#">News Now Link</a></li> <li><a href="#">News Now Link</a></li> <li><a href="#">News Now Link</a></li> <li><a href="#">News Now Link</a></li>--> </ul> </div> <div class="news-link"> <ul class="link-group"> <li><a href="http://www.ktre.com/category/241993/texas-news-now">Texas News Now</a></li> </ul> </div> <div class="bottom"> <div class="copyrightText"> <a id="wnLogo" href="http://www.worldnow.com"><img src="http://ftpcontent.worldnow.com/wncorp/logos/worldnow_white.png" id="wn"></a> <div class="text"> All content &copy; Copyright 2000 - 2018 Raycom Media. All Rights Reserved. For more information on this site, please read our <a href="/story/8774923/privacy-policy">Privacy Policy</a> and <a href="/story/8775106/terms-of-service">Terms of Service</a>. </div> <div class="clear"></div> </div> </div> </div>