Sprint now facing $1.2 billion class-action suit over early termination fees
By Darren Murph 
posted November 6th 2008 10:10PM
posted November 6th 2008 10:10PM
We told you it wasn't over, and now, that once "manageable" $73 million payment could possibly balloon to upwards of $1.2 billion. As predicted, the prior suit -- which was held in a California state court -- has led to a far reaching class-action lawsuit that could "potentially cost the company as much as $1.2 billion." The suit alleges that the $150 to $200 fees violated the Federal Communications Act and laws in every state of the country, and when summed from 1999 to 2008, they total a magical $1.2 billion. Things aren't looking great for Sprint on this one either, as lawyer Scott Bursor is running the show. Who's he? Just a guy who was involved in getting Verizon to fork over $21 million for the same thing earlier this year.[Via textually]
Suck it Sprint, they owe me 200 bucks!
its times like this that make me miss 1 year contracts :(
So you signed a contract that said if you leave early then you have to pay $200. You left early, they asked you to pay, and now you're complaining? I'm curious, did you get a cheaper phone when you signed your contract? If so, when you get back your $200 do you plan on giving them the amount of money that they deducted from the price of the phone when you signed the contract?
If I was a contractor and you paid me to do some work on your house, and I took your money and then stopped working on your house after doing 20% of the work, would that be ok with you? Because that's what you did to sprint.
I had to switch because there service sucked in Iowa and I couldn't get calls when I was on the road, now I have my iPhone 3G and couldn't be happier. My INSTINCT tells me stay away from Sprint FOREVER
I hear you I believe in responsibility. No bail outs and everything. But at the same time:
(1) there are FCC regulations, so the contractor analogy needs to modified: if the contractor gets $200 to if you cancel the contract, the law might say (as the common law does) that the liquidated damages must be graduated.
(2) there is no real freedom of contract where the only choices in the marketplace is either month-to-month contracts or 2-3 year contracts with EFTs. Now if the industry were, say luxury pastries, then cartel-behavior is not something that the public should concern itself with IMO. If the courts recognize the mobile phones are now like utilities, like running water, say, then the public can, IMO, assert an interest in shaping that marketplace.
I can't speak for sprint, but again, reading contracts before you sign them tell you what your options are. Most carriers let you test their service for the 15 to 30 days. If you don't like the service you receive in that time frame, then you can get out of the contract without paying, AND get back most of your money for the phone. If the service is as terrible as you say, how could you not have realized that after the first 15 days?
You complain that sprint closed you in a contract, then you rejoice about owning a phone designed by a manufacturer who tells it's customers what they can and can't do?
Contracts aren't all that bad. When your contract ends and it's time to renew, companies are usually pretty nice with what they offer you in order to get you to sign another one.
Yeah that bastards extended my contract without informing me when I came back from foreign holiday. I had about 10 months left in my 2-year contract and when I came back, they started a brand new 2-year one. I ultimately had to get out of Sprint after a year and had to pay for $200 fee. How do I get involved in this?
@wslcrew
You must be joking right? What you described makes no sense. Why wouldn't you have just told your credit card company that the ETF was an unauthorized charge? There's no way a company can just auto-renew a contract and you have to accept that.
holy crap that is a ton of money.
Get with the times, a billion dollars isn't that much anymore.
Its not going to be anywhere near that, as mentioned in the article, the same lawyer class-action sued Verizon over early termination fees. They settled for 21 million, Verizon originally got sued for 1 billion dollars.
They intentionally make the price huge so that they will settle for a higher price, and the lawyer, Scott Bursor, will make million in legal fees when settled.
if it ends up being 1.2billion that will be the official end of sprint...they will probably end up filing for bankruptcy to avoid having to pay that amount
That number is so ridiculous, dont these guys realize sprint has been going broke for a long time? They would be lucky to get 100k and a couple samsung instinks.
@Ray Samsung In-stink < I liked that slip there
But I just bought a brand new touch pro :(
As of its last quarterly statement, Sprint has $3.4 Billion in cash on its balance sheet and last year they generated over $40B in revenues. A $1.2B payment will not bankrupt the company, though they need more problems like they need a stick in the eye.
Jesus if all these lawsuits are going to overturn ETF fees. All the major carriers should do away with contracts all together and just have us buy our $600 phones upfront.
Yup, and you will see the death of smartphones in the United States.
No one but myself and other Engadget readers are going to pay five or six hundred dollars for smartphones.
What I would like to know is where the heck does 1.2 BILLION dollars come from? I *highly* doubt Sprint charged THAT many $200 ETFs.
(doublepost prevention)
You know there are the people that will pay that kind of money for a *non-smartphone*, right? Look at how well the Softbank/DoCoMo phones are selling on eBay. Heck, then the manufacturers will actually have to *try* and make nice phones instead of relying on carrier subsidies to get their phones out the door (and we'd be able to get all the nice stuff instead of the foreign makers tossing crap at America because they want their phones to be free or close to it).
I think getting rid of the contracts would help the phone business. I personally wont buy a new phone because when I try to hook it up they want to reset my contract. Phones are very popular in asia as status symbols and are much better then the ones here. I know people there who change there phone every few months.
Any particular reason why this wouldn't apply to every US phone carrier out there? Sprint isnt the only company with ETF fees.
I do not understand this? What is wrong with a $200 early cancellation fee? You signed a contract and they should not be obligated to allow you to stop it. High fees are always associated with break of contracts, and a $200 fee sounds reasonable;e especially if your normal monthly fee is $100...I had to pay up on a T-Mobile cancellation....
How are these fees illegal?
I don't the details of the class action suit, but I was charged and ETF when I cancelled my plan. I had the plan over two years. But I bought a phone over Ebay and had Sprint change my calling plan to the new phone. Lo and behold, my plan got reset.
Now this isn't a phone which I bought from Sprint using a rebate. I was told even if I changed to my older phone that I own outright from a few years back my plan date would get reset.
Suffice it to say, I am no longer a Sprint customer even though I loved the coverage and the phone selection. And I ate the $200 just to stop being a customer of over 6-years.
Ditto.
I was only 2 months away as well... I would enjoy getting around $100 back from my ETF. Structure it like AT&T and Verizon.... $5 off for every month you stayed on contract. Everyone wins.
Creating a contract and charging someone for breaking it isnt illegal. The illegality comes from charging the fee in violation of one of the numerous FCC ultimatums.
Read the WSJ article:
http://online.wsj.com/article/SB121562983731640019.html
Early termination fees are even worst here in Canada. 20$ per month left. So cancelling my 3 years contract 2 years early could cost me 480$ :(
But those are Canadian dollars.
ha ha ha ha ha ha ha
Aaah...boy, does it feel good to be able to make THAT joke again.
Yeah, I somehow doubt it will last. When the Canadian Dollar reached parity with the US Dollar and the same time Pound Sterling was worth twice a the US Dollar, I officially lost hope in said dollar.
Who's your carrier? A lot of the contracts say $20 per month UP TO $200.
@ Ellianth:
Telus: http://www.telusmobility.com/on/pcs/term_contracts_faq.shtml
The cancellation charge will be the greater of:
1. $20 multiplied by the number of months remaining in the term, or
2. $100
By the way, it's against Consumer Protection Bill in my province (Quebec).
It be nice if they give me back my money. I was not able to get decent signal in my new home and had to change service. They charged me $200 to get out. I guess in some computer they had they claimed I had some kind of signal on property, and they didn't care if my phone dropped calls every few minute, or that sometimes the phone couldn't make calls at all.
Learn how to negotiate.
You have no negotiating leverage when canceling your account.
Yup I found that out too. I tried to get on Nextel plan because the people working on my property had no problems. Sprint didn't want to change my account because they told me it was on some old Sprint account "about a year old at the time?" I asked the Sprint guy to give it a shot too, and he got the same answer. Sprint only took few minute canceling my account, but took almost 3 days to give me a firm "NO" on moving my account to Nextel.
Boom, baby!
The Only Company to offer the best and affordable plans out there is being attacked. Oh My Sprint, they just won't leave you alone. I hope this goes away. Verizon and ATT are the ones who should be facing things like this because they outright rip off people
I assume you mean Bell because I am going through the same process. Bell Canada is another company who I hope takes it like Sprint sometime soon.
that was directed towards Alexandre
I really hope all the current Canadian mobile phone providers get beat up with a sack o' bricks by those that won/will win the AWS spectrum and start competition.
Awesome. AT&T next, please.
$21 million is a little less than $1.2 billion. Maybe that Scott Bursor isn't that hot shit. Just saying, is all.
just sayin the band in your picture blows
Have you even heard "Blackbird"?
affirmative. does not change my opinion of your band.
"Ties That Bind"? "Buried Alive"? "Come To Life"?
Gimme a break man, if there's any band left in this world with any musical integrity, it's Alter Bridge
I can't believe all these comments FOR extra fees! If you like to throw money away I assume that you must not bust your a** for a living. But for those who do and need a cellphone, the market is swamped with service by contract only carriers. But it goes against free market, where a customer may change service if s/he finds a cheaper service or just can't afford to continue paying.
One person commented that it'd be the end of smartphones in the U.S. HAH! I beg to differ, if the smartphones cost too much and demand falls, price will have to drop as well. Since technology is constantly improving over time, the next "latest" phone/computer gadget that comes out puts the older models in a discount corner (like automobiles).
The early termination fees were just a way to lock you in or be punished for not being satisfied with the service.Can't believe ya'll don't see it like it is...obviously the judge in the Verizon case did.
All two of the comments?
"I beg to differ, if the smartphones cost too much and demand falls, price will have to drop as well. Since technology is constantly improving over time, the next "latest" phone/computer gadget that comes out puts the older models in a discount corner (like automobiles)."
You are right, but you also bring up the valid point that the USA would get older generation models without contract... meaning people like me lose in the end as the companies will only supply old crap ware for a discount. These contracts aren't that bad. I pay 90 bucks a month for unlimited internet (not to mention i tether my laptop for some cod4 action like an hour every day for free), 300 text, virtually unlimited minutes with nights and weekend, and extra line (share plan), and still i get heavy discounts toward current generation smart phones.
Any ways, if you "bust your a** for a living" then YOU must understand what its like to be called into work and then sent home without pay. These are contracts, if you are unhappy, too bad, do your research before signing one, other wise, they should be handled on a case by case bases as im sure a lot of the people signed on to this 1.2 billion dollar case are just there for the cash and not because they have been wronged.
@ray- "meaning people like me lose in the end as the companies will only supply old crap ware for a discount"
Like they don't already? Have a good look at what Samsung supplies to Asia compared to what they supply to America. Same with LG, SE (look at the SO905iCS- the C905 they released internationally just can't compare), and Nokia. Even Moto supplies better stuff to Asia (Korea got 2 new StarTAC versions- nothing in America).