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Contract Termination fees ruled illegal (United States)

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Posted by Sony α
In one of the most significant legal rulings in the tech industry this year, a Superior Court judge in California has ruled that the practice of charging consumers a fee for ending their cell phone contract early is illegal and violates state law.


Posted by golemsmate
i think they should be charged. Because the contract company are giving them a phone for free and if they just cancel the contract they could keep the phone.

when people go into a contract they are signing up for a certain period of time and should stick through it

Posted by carkitter
True, but this does not work in all cases. Early termination for a valid reason should be possible, and some Early Termination Fees (ETF)reduce as time passes, while Sprint's do not. It appears that the Judge ruled that Sprint did not use a financial process to determine a fair ETF and therefore their fee could not be enforced. This is a mistake on Sprint's part. I don't think they'll manage to get the Federal Government to take control of ETF, its hardly of National Importance unlike the credit crisis involving home mortgages.

I have had issues with VodafoneNZ over ETF's. As my Vodem is a buggy piece of junk and finally stopped working, I determined to have my Data plan moved from the Vodem SIM card to the Phone SIM card. But because VodaNZ's abacus slash computer system can't cope with that scenario, I had to pay the ETF to continue to use my plan through my V640i. I didn't want to end the plan early but was forced to by the carrier.
In light of this decision, I wonder whether ETF policy based on the shortcomings of their computer system is enforcable? Probably too late now.

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[ This Message was edited by: carkitter on 2008-08-08 04:45 ]

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