Verizon loses ETF class action lawsuit, ordered to pay $21 million
By Tim Stevens 
posted July 2nd 2010 11:51AM
posted July 2nd 2010 11:51AM
Congratulations Verizon, you're the latest wireless provider to lose a class-action early termination fee-related lawsuit! It's a dispute that's been circulating in courts since 2008, and while the settlement was agreed upon quickly, there were a few lingering appeals that have taken this long to get cleared up -- and not in VZW's favor. The issue at hand was the company's $175 flat early termination fees, behavior that has proven legally naughty again and again when the same fee is levied regardless of whether you were one month or 20 months into your contract. Each customer named in the suit will receive approximately $87.50 for their troubles, a total of $21 million Verizon will have to pay out. That's a bit more than AT&T got hit with back in January, but a whole heck of a lot less than Sprint's massive $73 million fine.
I fynd it funny dat verizin gets off wit a slap on da wrist nd sprint....a far smaller company....has to give their first born for the same issue.....hmmmm????
@walkinit Yeah well America is great like that. We say Antitrust but if you have lobbyists, then we love monopolies. Hell just look at whats going on with ATT Uverse yet Comcast is the ONLY cable company in my town and Time Warner is the ONLY company in the town over one giant monopoly board who paid to get exclusive access to towns.
Ok so because of lawsuits like this im paying now 325$ ETF thanks to all the class action happy public!
@FireSokar No, 1st because you are taking an unprorated amount, well, including a future settlement.
2nd this was a way that companies could ensure $420 (6 months x $70) revenue towards the end of a contract versus an ETF, because people saw it as nearly 6 months free services relative to the ETF.
3rd this allows a lower number, so early renewal of a new contract is less valuable to customers
4th we are, currently, in an age of rapidly progressing cellphones, therefore, we are more likely to have cellphone envy. If you are lucky enough to avoid this, then you have nothing to worry about, if you have this, then expect cheaper rates towards the end of a contract in the future.
Why are people apologists for corporations who must (by design) do everything in their power to maximize shareholder profit at customers' expense?
The rest of the world has illustrated how gross the excesses of our wireless industry are - from the ETFs they charge, to the contract terms they dictate, to the way they hoard cash and don't invest in their network until it becomes overstrained (which they then use as reasons to jack up rates).
They are making insane amounts of profits with ETFs and they would make only marginally less insane amounts of profits without ETFs. Don't sit around and blame people for trying to get out of ETFs. If the US would just do what the rest of the world does and let people buy unsubsidized phones and actually charge a reasonable amount for those who do want one subsidized, these lawsuits would be a non-issue.
Good riddance.
@cheezwhiz
Could not have said it better myself!
@EMoSLO What do you mean 'let people buy unsubsidized phones'? You absolutely can buy an unsubsidized phone, but no one wants to pay $299 for something they could get for free with a contract.
I'd have to agree.
So what did this actually do? Oh wait, it made it WORSE for the public. Yes, that's right... With AT&T, I have a $325 ETF that degrades $10 per month over my contract... Hmm, if I have 1 month left on a 24 month contract, I still pay $85...
@phiz118 So, roughly the same amount you would pay for the service if you kept it for one more month, eh.
@phiz118 How is that worse, exactly. Before this you would have had to pay the full $325 ETF even on your last month, now it's $95.
A) I cancelled my verizon contract about 3 years ago and had to pay a flat fee of $175, so should I be expecting a check?
B) how does this affect the new ETF of $375 - $10 a month as even after 23 months is up you'd still owe $185.. Can they sti charge you that?
@Pocketsneak
375-(23x10)=145
@PDOG
Remember to stay in school kids!
What I mean is the way it is set up now you cancel your contract 1 month short you still have to pay $175
Getting out of ETF's are fairly easy as long as you have a valid dispute. Basic contract law states that both parties have to receive something. If you, as a party to the contract are not receiving a the advertised service (I don't care what about their "no guaranteed service quality" wording says) you can get out of the contract.
I know this because I recently left ATT and was charged close to a grand for all the lines I canceled. I sent their dispute department a nice letter letting them know I had file three complaints with the FCC about their lack of service, the BBB was aware, and the Attorney General had a case number for them.
They quickly dropped the ETF.
To answer a few repeated questions:
The new $325/$350 ETFs that AT&T/Verizon have in place are in response to lawsuits like this. Basically, as long as the ETF has a reasonable proration to it, cell phone companies can set the bar as high as they wish.
i had to pay two early termination fees in 2003 or 2004 for two lines. i was almost finished with the contract but their rep told me the wrong information and said that my contract was already over. i tried to argue but they didnt believe me when i told them their rep told me the wrong info. can i still get the $87.50 per line?
lets see this done in Canada, wait it will never happen
With Telus in Canada, you pay $20 per month remaining in your contract. A Rogers store employee (who has misquoted policies in the past) told me that with Rogers, you pay $20 a month, up to a maximum of $200 or something. But again, she's a little stupid, so I wouldn't trust the Rogers policy to be completely correct.
This is kind of the equivalent of the courts forcing Verizon to be nice and use lube when they rape us next time, but hey, it's a start.
Congrats some sense at last, and Verizon doubled the ETF!!! and they are still not illegal! and they continue to exist. ETF's are criminal.
2 years ago I left sprint after many years due to them changing terms by raising some fees, and moving to an area in which reception was virtually non-existent. They refused to cancel my account based on the material change in contract without an ETF. I stated that we were canceling based on those changes regardless and they kept sending collection notices for years. Each time I would send a letter of explanation to the collection company and (I assume) the collection agency would refuse to continue. They would then hire another agency, and I would respond with a new letter, along with copies of the previous letters sent to the earlier collection agents. Because of the way they acted I will never go back to sprint ever again. Up until then I had been a loyal customer, getting many discounted rates, such as $3 unlimited text, $5 unlimited internet etc. and was paying under $150 for 4 phones, 2 being smartphones with slingbox etc. on them. As much as I'm unhappy with ATT pulling a bait/switch on the iPad unlimited data, I think I may be better off continuing to pay exorbitant prices with them and waiting until someone files a class action and gets us some money back for having to auto renew our unlimited data in order to keep it. What we really need is a good inexpensive company like boost to start letting people take their iPhones and iPads over to them and get everything unlimited for $50 a month like their other phones, but until that happens, I suppose if we want the apple products, we are stuck paying a premium for them. Considering that I get virtually the same functionality from my iPad and skype along with text free for $30 a month unlimited data, $200 for 2 iPhones monthly is a bit of a rip off. However, except for the high prices and the bait and switch, I haven't had too many problems with ATT. Sprint lost my trust when they tried to charge me that ETF on 4 phones when it was wrong for them to do so, and I will never forget it.
So Att just had me pay 175 for early trimantion of my iPhone 3GS I had 3 lines and made this one to get a 3GS for the lower price but they never knew that so should I go
Get my $$ back?
How do I get my money?
@sonicyoof
sell your body to the night
What I don't understand is that I wasn't offered a flat rate when I was thinking of canceling one month early. It would have been $60 to cancel one month early, but if I did everything according to the contract, but since it was $32 a month, I chose to stay until the end of the contract.
In all seriousness, even thought I didn't have to pay the flat rate fee, it still seemed like an unreasonable price. I know many people are saying that if you agree to a contract, it should be expected for the consumer to not complain about it. While I expect to follow through the terms, that doesn't mean I think the business practice is fair.
big corporations have always got over on the little people -_- two year contract with sprint for the evo i still have a few days to cancel but i like the phone -_- i hate being locked down for two years -_-
how does sprints etf work?
So if it's not okay for wireless companies to have flat ETFs, why is it okay for Comcast to charge a flat $250 for terminating a Digital Play contract?
It's ok Verizon. You are still the best.