Digital Trends
Sprint Nextel has obtained preliminary court approval to settle a class action suit over early termination fees associated with mobile phone service contracts for $17.5 million. Although the settlement does not include a California case (in which Sprint may be on the hook for $73 million after its early termination fees were ruled illegal), it may serve as a precedent which could put off a pending $1.2 billion nationwide class-action lawsuit filed against the company over the same fees.
Telecommunications operation Sprint is now facing a $1.2 billion class action lawsuit over allegation that allege the company’s early termination fees violate both the Federal Communications Act and laws in every states. The new lawsuit has been filed by Scott Bursor, the same attorney who spearheaded a case in California against Sprint over unlawful termination fees—and won a $73 million judgement earlier this year.
In a move that’s making waves through the entire mobile industry, an Alamedia County Superior Court judge has issued a tentative ruling ruled that the early termination fees Sprint charges its customers for prematurely backing out of their cell phone contracts violate California law. Judge Bonnie Sabraw also found Sprint must pay some $18.2 million to customers who have been charged the fees, and stop attempting to collect some $54.7 million in fees they’ve assessed to other customers.
The European Commission is taking steps to change the termination fees, which are the amounts mobile operators charge each other to use their networks. The plan is that by 2011 those figures will be harmonized across Europe, as opposed to the national fees currently enacted – currently 27 different ones. The belief is that this will result in lower call costs for consumers.
These termination fees are nine times higher for mobiles than for landlines, according to the BBC, ranging from two Euro cents a minute in Cyprus to 18 Euro cents a minute in Bulgaria. The estimate is that by bringing all these fees into line, calls could become 70% cheaper.
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