So apparently consumers can win in arbitration hearings. A potential $1 billion class action suit is set to move forward, thanks to a ruling by Eugene Farber, a senior arbitrator-mediator for the American Arbitration Association. The class, which at 70 million is the largest ever certified in arbitration, is disputing early termination fees they were assessed by the company. These fees are being deemed “illegal” by plaintiffs’ council, Scott Bursor. This I’m having trouble wrapping my head around. No one likes ETFs. Why would they? If you want out of your cell service, you want out of your cell service. Problem is, you signed a contract, and in order to escape from that contract you need to pay a buy-out. Now, over the years this has been a firm $175 buyout. However, in late 2006, Verizon changed its policy to prorate the fee, dropping it $5 a month until your contract is up. It’s at least a step in the right direction. If the class is suing for reparations — i.e., trying to get back the prorated amount — then yeah, I think this case has legs. However, if they want all $175 back because they don’t feel they should have been charged any ETF, well, then I have one suggestion: Don’t sign a contract! Yeah, you wanted that fancy new phone, and you could only afford it with a contract. Fine. But you still signed it, knowing it was a two-year deal. And the carrier, in exchange for your pledge of loyalty, knocked $150 or so off your phone. I’ve always though that was kind of an even exchange. Yeah, no on wants to be tied down for two years, but no one wants to pay $400 for a phone, either. So you compromise. But once you take that subsidy and sign that contract, you shouldn’t scoff when you try to terminate early and are told you must pay first. No, you shouldn’t be paying $175 when you have three months left on your contract. But as I said, if the class is seeking a prorated refund, then yeah, I’m on board But if they’re saying that ETFs in general are illegal, well, I can tell you what happens if they win. Because at that point, there’s no incentive to keep your contract. You can come and go as you please, and everything becomes prepaid. Which translates to everything becoming more expensive. (Prepaid certainly can be cheaper, but heavy talkers are usually better going with a contract rate plan.) So, seeking proration of previously assessed ETFs, yes. Seeking full $175 refunds, hell no. [RCR Wireless News]
5 comments… read them below or add one
Why does everyone feel the need to post their opinion whenever they have one. Is it that cathartic?
That’s just fine for people who cancel six months into the contract. But I’ve been with Verizon for four years. And now in the 48th month of the contract they want me to make a choice. If I cancel now I will be billed $175, but if I wait until the day after the contract is up, they’ll only charge me for the next month of service. A month of service, I won’t be using!
Well, we switched providers, thinking our 2-year plan had expired, but missed it by FOUR DAYS. Now, they want us to pay $709 for our three phones…
I came late into this discussion. I just got the lawsuit info in the mail today. I had to cancel my contract due to personal reasons a few years ago. I had three phones for myself and family members, so it cost $525 plus balances due. I understand about the contract, and buying out and the value of the phone I bought, etc etc. But one thing not considered here is that, at the time I had my phone, Verizon would renew your contract for 2 years even if all you did was change your billing plan. Now *that* is unfair.
My 88 year old father who is extremely hard of hearing was contacted by Verizon and offered a new phone and one month free as a “courtesy” the person said. Thinking the rep was being very kind, he accepted although now he doesn’t really remember the incident at all. The new phone was sent with instructions to call in and activate which he did not realizing he was committing to a two year contract. The oh so kind representative managed to lock in an 88 year old senior citizen with an extremely limited income for two more years. As his daughter, I asked for proof in the form of a taped recording that he had in fact agreed to these terms. they have none. I asked for written documentation. They have none. I asked to break the contract, but they said when he called the number he was asked to he gave his permission. For all senior citizens out there….Be very careful! For all children of senior citizens ……Is there anyone out there that can advise me as to what course of action to take next.