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Cell Phone Termination Fees Ruled Illegal

Discussion in 'BlackHat Lounge' started by MontyzPython, Jul 31, 2008.

  1. MontyzPython

    MontyzPython BANNED BANNED

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    It's about time...

    hxxp://tech.yahoo.com/blogs/null/99655

    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.

    The preliminary, tentative judgment orders Sprint Nextel to pay customers $18.2 million in reimbursements and, more importantly, orders Sprint to stop trying to collect another $54.7 million from California customers (some 2 million customers total) who have canceled their contracts but refused or failed to pay the termination fee.

    While an appeal is inevitable, the ruling could have massive fallout throughout the industry. Without the threat of levying early termination fees, the cellular carriers lose the power that's enabled them to lock customers into contracts for multiple years at a time. And while those contracts can be heinously long, they also let the carriers offer cell phone hardware at reduced (subsidized) prices. AT&T's two-year contract is the only reason the iPhone 3G costs $199. If subsidies vanish, what happens to hardware lock-in? Could an era of expensive, but unlocked, hardware be just around the corner? It's highly probable.

    Of course, the carriers aren't going to take this lying down. Early termination fees are seen as critical to business, so carriers are expected to look for ways to reclassify the fees (such as by calling them "rates," part of the arcane set of laws that covers the telecommunications industry). The industry is also pushing for the federal government to step in and claim oversight over the early termination fee issue, which would invalidate any state ruling. The FCC is generally more tolerant of such fees, though Chairman Kevin Martin has proposed a plan whereby the fees are decreased the closer you are to the end of your contract.

    The FCC may also buy the argument that, since carriers are nationally based (and consumers can use their phones anywhere in the country), that a single policy should apply across the nation, rather than creating a patchwork of legislation that could lead to confusion and chaos caused by having 50 different policies.

    Is the early termination fee dead? Not yet, but it's looking a little haggard.
     
  2. cparainmaker

    cparainmaker BANNED BANNED

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    damn cell phone companies...
     
  3. Xcptn

    Xcptn Registered Member

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    oh it would be fuckin sweet to get rid of early termination fees.
     
  4. Black Hat Seo

    Black Hat Seo BANNED BANNED

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    Good luck with that one, the government wont lose hundreds of millions of dollars in taxes they collect from cell carriers.

    Its unconstitutional like most things these days and violates consumer rights. The cell companies know its not the termination fees being gone that will kill them, its the fact that they cant be fucking assholes when you have a problem anymore because you can just say lick my balls I'm going to Verizon then and taking my number with me.

    Big business should follow the rules of small business but thats never going to happen. If a restaurant treats you badly, you can go down the street to a new one and take your money with you, thats what forces small business to keep their prices competitive and provide excellent customer service.

    Losing this battle means losing hundreds of billions of dollars over the course of a number of years because now they wont be able to hire Shaniqua who could give a fuck that your voicemail isnt working for three days, they have to hire someone smart to actually fix the problem lickety split and with a smile on their face so you dont bail on them and go to another carrier.
     
  5. bigkee42

    bigkee42 Junior Member

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    I am not in a position to really comment because I do not plan to cancel my service anytime soon. My rates are great and my service is good for me. But before I started paying my bills I ran into this issue quite a lot (even went against my credit, back in the day). So, everyone that could benefit from this, I am glad for you. The article says it best though because they will find another way to recoup that money or regain leverage.
     
  6. MontyzPython

    MontyzPython BANNED BANNED

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    Exactly. Now, when twenty fucking scientists from the NSA can't figure out why your cell phone bill is so high either, you can just say,

    "Fuck you. Can you hear me now?"
     
  7. Black Hat Seo

    Black Hat Seo BANNED BANNED

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    Charging just a few bucks more a month per user would recoup that and then some, and all the carriers would agree to the rate hike so they all have similar pricing.

    I have to think the main issue is the freedom it gives to customers which big business cant stand.

    Take Comcast for example, a nobody here a few years ago, I had four cable choices, and if one dicked me around that was it for them.

    Comcast came on the scene and I have never had better customer service in my life, these guys used to say we'll be there between 930 and 10 and I would be like what! You mean to tell me its only a half hour window? I dont have to sit it home for 9 hours waiting?

    It was great, until of course they took over the entire market. Now the customer service blows, I pay a fortune for the service already which goes up every six months, and they have all these new fees they hit you with including when I moved and they charged me $400 for installation on my bill without even telling me.

    $400 for some retard who gave me an attitude the whole time I'm sure just because I have nice things and he hates his life. He was here about 20 minutes to switch on the outside box.

    I said how the fuck do you have the balls to charge me $400 when ive been a three year customer paying 4k a year to you? They said: "We had to send a truck out"

    Nice, well isnt that what they do? install fucking cable television? why do I need to pay to pay for a service? That's like a diner charging you a booth rental, a piece of their electric bill, part of their health insurance plan, and for the soap to wash the dishes after your done.
     
    Last edited: Jul 31, 2008
  8. Vivica

    Vivica Regular Member

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    I think they'll likely just reduce or eliminate subsidies for their hardware. This ruling seems like it will be a good thing if it isn't overturned on appeal. Today's "must have" cell phone is tomorrow's unwanted trash and the wireless providers give you more all the time in order to compete. Long-term contracts suck!
    My first cell phone was a Motorola bag phone from Radio Shack and Sprint charged me a $1200 deposit for service. You got 45 minutes/month for about $35, and additional minutes were like $.90/minute! LOL
     
  9. aba120

    aba120 Registered Member

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    I think they will just change the terminology of the "termination fee" call it something else as an increased rate, and get around it somehow. That is called a legal blackhat technique... lol.
     
  10. catspurley

    catspurley Registered Member

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    Interestingly enough...

    I've been off my Verizon contract for about a year now and they try once a month to get me back on with a free phone or an extra 200 minutes, or whatever offer of the month.

    They are so goddamn nice and friendly now. B/c they want me to sign another contract, but it ain't gonna happen...

    I always tell them that I've gotten better customer service in the past year than in all prior years combined and I'm sure it's because they know I'll walk if I'm not happy. No amount of free minutes or fancy new phone could be better than that.

    I even noticed that the same person has been calling for the past few months so I think that when you're off contract you might even get "assigned'" to someone. Works for me!

    It's pure bullshit how big business customer service has gone down the tubes and it's great to see that at least with cellphones this terrible trend may reverse...
     
  11. Pofecker

    Pofecker Senior Member Premium Member

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    With Verizon buying Alltel this year, I looking forward to this becoming a illegal practice.

    With that said, I'd be interested to see what the cell phone giants do with their hardware prices. If this becomes a nationwide law, I can see the consumer paying a good deal more for the latest and hottest cell.

    No termination fee = Higher hardware costs

    Either way, big business isn't going to lose money or give up easy.

    I'm sure this is just the beginning.
     
  12. wmitchell003

    wmitchell003 Regular Member

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    I have T-mobile and I am locked into the contract for another 6 months and I couldnt be happier. Their customer service on the phone is usually great(Although Sarah in the local payment center can be rude at times). The service is great too, so this makes me want to keep them and I will most likely renew my contract. I think whether their is a contract or not good companies realize that customer service is the deal breaker when choosing a carrier.

    On the other hand, I think that Comcast sucks as fas customer service goes, but their service is so great that I stick with them. The fastest internet service available, and it is definitely worth the price.

    I can see them coming up with some sort of deal where they give you a "free" or discounted phone but divide the price of the phone into say 24 months and you will be paying a small portion every month. If you cancel the phone service before 24 months you will have to pay the prorated amount for the phone. This way there is not a termination fee, but rather a charge for the phone.

    People will go in the stores and pick out the best phones, and they will not cancel because they will still feel as though they are locked into a contract.
     
    Last edited: Aug 1, 2008
  13. scubaslick

    scubaslick Regular Member

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    Companies like Metro PCS here in Texas are going to kick the everloving shit out of the big boys if they don't wake up.

    I paid $200 for my phone up front. I pay $53 a month for unlimited everything: calling, web, text, long distance, pictures, email, directory assistance. the only thing this won't do is scrotum massage and I hear they're adding that to the next model.

    The catch? It only works here in the immediate area. /shrug I have zero problem with that. If I still traveled for a living I might have a problem, but I'd probably just buy a prepaid phone for my trips.

    The biggies better learn this lesson fast or they're going to take it in the ass just like American car manufacturers are taking it in the ass right now because they didn't pay attention to the competition.
     
  14. wmitchell003

    wmitchell003 Regular Member

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    You crazy! lol Metropcs is taking over. Slowly but surely. I know alot of people that are switching over.
     
  15. turbotec

    turbotec Junior Member

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    I sure hope the get rid of this. I hate those stupid fees
     
  16. vapid2323

    vapid2323 Newbie

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    Ok so they get rid of the fees, great.

    All the phones you get for cheap will cost a shit load more.

    PDAs

    HTC TYTN Retail Price: $999.99
    Apple iPhone 8GB Retail Price: $769.99
    Palm Treo 680 Retail Price: $699.99
    Treo 750 Phone Retail Price: $899.99
    Samsung Blackjack Retail Price: $599.99

    Flip Phones/Non PDA

    Motorola KRZR K1 Retail Price: $799.99
    Motorola SLVR L7 Retail Price: $399.99
    Motorola ROKR E6 Retail Price: $699.99
    Motorola V3 RAZR Retail Price: $399.99

    The reason for the contracts is not just to treat you like crap but also to make payments on the real price of the phone. Now sure they can jack up the price of your plans and remove the early term fee but that will be pointless as I can go into a store buy a phone for cheap and then close the account.
     
  17. vapid2323

    vapid2323 Newbie

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    So pay it when you buy the phone or pay it over the time of the contract.
     
  18. jking09

    jking09 Newbie

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    doing away with the early termination fees will only jack up some other fee(s).
    you can't expect anyone to agree to losing money without having a plan to get it another way..
    make since?
    don't get too excited..
     
  19. vapid2323

    vapid2323 Newbie

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    That might be true, but thats not what apple sells the phone to AT&T for. You can say the same about all the other phones on my list as well.