Senator Proposes Limits On Early Termination Fees

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Senator Proposes Limits On Early Termination Fees

A handful of senators introduced a bill today that aims to set limits on the early termination fees when consumers want to leave their contract early, reports thehill.com.

The bill, which was proposed by Sen. Amy Klobuchar (D-Minn.), will be tricky. If it limits how much carriers can charge, then it may limit how much carriers can subsidize handsets, which means consumers may have to pay more for phones. In a statement, CTIA-The Wireless Association President and CEO Steve Largent, said: “This type of prescriptive mandate runs the very real risk of limiting consumer options in the future.”

It’s a little unclear how the bill would be worded, but in addition to scrutinizing termination fees, it will also require wireless providers to pro-rate the fees and clearly notify customers about the fees—not only at the time of purchase but for the duration of the contract. Today, most carriers do pro-rate the fees. Klobuchar, along with other sentators, including Russ Feingold (D-Wis.), Jim Webb (D-Va.) and Mark Begich (D-Alaska.), are the ones backing the bill. They are calling the fees “budget-busters” and that say the fees, which range between $150 and $350, are not fair to consumers.

The bill is in direct response to Verizon Wireless’ recent announcement that it would start doubling its fee for smartphone users. Last month, the carrier said it will increase its ETF’s from $175 to $350 because of the higher prices of today’s phones. The other top three top carriers are not following suit. Instead they are sticking with their somewhat lower fees around $200.

Tricia Duryee

@triciad Dec 3, 2009 5:40 PM ET

Photo: Verizon Wireless

Posted In: Legal, Companies, Verizon

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FixMyCellBill.com

Tricia, nice article. I wanted to respond by addressing, in particular, those people who are facing ETFs because their wireless service was too expensive so they had to end their contracts prematurely. For these people, avoid both the ETFs and the expensive plans by seriously cutting your wireless costs; an intuitive but often realistically tough proposition. However, I work in the consumer advocacy division of the Houston-based company Validas, where we electronically audit and subsequently reduce the average cell bill by 22 percent through our website, http://www.fixmycellbill.com (and I’ll add that 22 percent equates to over $450 per year for the average user).

You can find out for free if fixmycellbill.com can modify your plan to better suit your individual needs by going to the website. Check out Validas in the media, most recently on Fox News at http://www.myfoxtampabay.com/dpp/consumer/conlaw/lower_cell_phone_bills_072409 .

Good luck to everyone reading on retaking control over your wireless expenses and potentially freeing up some extra cash this holiday season.
Dylan
Consumer Advocacy, Fixmycellbill.com

Kim

Funny how the backers of the bills that authentically try to protect consumers—that's all of us—against the machinations of business always seem to have a D next to their state. And the backers of bills that (think of a Steve Largent double fake) loudly proclaim to protect Consumers, Apple Pie And The American Way but are really crafted to allow greater machinations by business? There's an R by theirs.