Sprint Nextel just got ordered to refund $18.25 million to California customers who paid early termination fees to get out of their mobile contracts. A judge is also requiring the company to relinquish $54.75 million in early termination fees it charged that went unpaid by Cali consumers.
It was ruled that the fees, which range as high as $200 per line, were an unlawful penalty under California law and were levied mainly as a way to discourage customers from leaving their contracts.
Two weeks ago Verizon agreed to pay $21 million to settle a similar class action suit, which inspired a slew of major wireless carriers -- T-Mobile, Verizon and AT&T -- to pro-rate their early termination fees to avoid or settle similar lawsuits. FYI, a pro-rated fee means a customer pays less to break a contract the longer one continues the contract.
The Federal Communications Commission is mulling over regulating early termination fees on a nationwide basis, yet is also considering whether they should block class action lawsuits like the Sprint case in the future. (WTF?)
Wired.com: Sprint to Pay Back Early Termination Fees