dslreports logo
 story category
Verizon Settles ETF Lawsuit For $21 Million
Admits no wrong doing, Sprint still faces suit...

Verizon has agreed to settle a class action lawsuit for its early termination fees for $21 million, according to PC Magazine. The company potentially could have paid much more if they lost the case, given the 70 million participants were demanding refunds up to $1 billion. Verizon Wireless admitted no wrongdoing, and a spokesman says the case was "a distraction to our business, and we wanted to get it settled." While it's true that customers do sign a contract, many claim Verizon's enforcement was draconian:

quote:
Among those who sued Verizon Wireless was Harold Schroer. He had been a Verizon customer for 2.5 years when he changed his plan at the suggestion of a customer representative. Dissatisfied with the new plan, Schroer attempted to return to his former level of service, but was told that that it was no longer available. When he opted to cancel his account, Verizon said Schroer would be charged a $175 termination fee.

Thanks to tough state-level laws, the occasional mean Attorney General and class action suits, wireless carriers have been forced to change their ETF policies, and now usually reduce the early termination penalty by a certain amount each month you're under contract. They're also now offering 30 day trials, and have stopped the particularly annoying practice of extending your contract every time you make even tiny plan changes (you can thank Minnesota's Attorney General for that one).

Wireless operators are working hard to avoid future scenarios where consumer complaints might actually have an impact on their business models. Carriers are lobbying the FCC to pass wimpy federal guidelines that would invalidate the stronger state-level consumer protection laws that prompted these changes in the first place. They're also burying fine print in your contract to attempt to force you into arbitration, though the courts have recently been deciding that fine print can't take away your right to participate in a class action.
view:
topics flat nest 

pnh102
Reptiles Are Cuddly And Pretty
Premium Member
join:2002-05-02
Mount Airy, MD

pnh102

Premium Member

Contracts Mean Nothing!

So if I sign a contract and I don't feel like living up to my end of it, I can find a sleazy lawyer who can sue for me. Nice!

DoRight
join:2007-07-20
East Petersburg, PA

2 recommendations

DoRight

Member

Re: Contracts Mean Nothing!

I feel it's unfair to make someone sign a new contract after you have already completed the first two year agreement. It's unfair if there is no equipment or service discounts involved. This is coming from someone that was in the industry for 13 years.. All people are wanting to do is change their plan.. What does that cost a carrier? NOTHING...
ctggzg
Premium Member
join:2005-02-11
USA

ctggzg

Premium Member

Re: Contracts Mean Nothing!

said by DoRight:

I feel it's unfair to make someone sign a new contract after you have already completed the first two year agreement. It's unfair if there is no equipment or service discounts involved.
The company isn't "making" them do anything.

DoRight
join:2007-07-20
East Petersburg, PA

DoRight

Member

Re: Contracts Mean Nothing!

If they want to change their plan then Verizon was making them sign a new contract. It's unfair to make then sign a new contract just to get a better rate... But I bet you'll argue that.. I just left VZW.. They suck...
mikeg803
join:2008-07-12
Columbia, SC

mikeg803

Member

Re: Contracts Mean Nothing!

VZW no longer requires customers to sign a new contract when they change their plan. Besides, even when they did these incompetent consumers that are suing VZW are just that, incompetent.

pnh102
Reptiles Are Cuddly And Pretty
Premium Member
join:2002-05-02
Mount Airy, MD

pnh102 to DoRight

Premium Member

to DoRight
said by DoRight:

I feel it's unfair to make someone sign a new contract after you have already completed the first two year agreement.
You're right of course... but where was anyone coerced into signing anything?

tc1uscg
join:2005-03-09
Gulfport, MS

tc1uscg to DoRight

Member

to DoRight
said by DoRight:

I feel it's unfair to make someone sign a new contract after you have already completed the first two year agreement. It's unfair if there is no equipment or service discounts involved. This is coming from someone that was in the industry for 13 years.. All people are wanting to do is change their plan.. What does that cost a carrier? NOTHING...
You are 100% correct. An current customer whos contract is up should not have to stay on for 2 more years, however, they also should pay FULL price for a phone upgrade. Why should VZ give someone a FREE or reduced price phone if that customer will cut and run in a few months? Any thoughts

canesfan2001
join:2003-02-04
Hialeah, FL

1 edit

canesfan2001 to pnh102

Member

to pnh102
said by pnh102:

So if I sign a contract and I don't feel like living up to my end of it, I can find a sleazy lawyer who can sue for me. Nice!
And end up getting a whopping....

21 million - 40% for the lawyers = 12.6 million / 70 million participants gives you:

$0.18!!!!

All that at cost of paying only one $175.00 ETF!
88615298 (banned)
join:2004-07-28
West Tenness

88615298 (banned)

Member

Re: Contracts Mean Nothing!

said by canesfan2001:

said by pnh102:

So if I sign a contract and I don't feel like living up to my end of it, I can find a sleazy lawyer who can sue for me. Nice!
And end up getting a whopping....

21 million - 40% for the lawyers = 12.6 million / 70 million participants gives you:

$0.18!!!!

All that at cost of paying only one $175.00 ETF!
The important thing is thanks to these lawsuit and the "sleazy" lawyers behind then EVERYONE now has 30 day free trials and pro-rated ETFs. ETFs shouldn't be $175 anyways. The mobile companies are still making a killing off of them like they do with their texting rates.

pnh102
Reptiles Are Cuddly And Pretty
Premium Member
join:2002-05-02
Mount Airy, MD

pnh102

Premium Member

Re: Contracts Mean Nothing!

said by 88615298:

The important thing is thanks to these lawsuit and the "sleazy" lawyers behind then EVERYONE now has 30 day free trials and pro-rated ETFs.
Even if that was true, people still had options of prepaid phones and paying full price for the phone as means of avoiding contracts altogether.

Anyone who sues over an ETF he/she agreed to pay should be made to pay double or triple the ETF in my opinion.
said by 88615298:

ETFs shouldn't be $175 anyways. The mobile companies are still making a killing off of them like they do with their texting rates.
So don't agree to a contract that includes one. Problem solved.
Skippy25
join:2000-09-13
Hazelwood, MO

Skippy25

Member

Re: Contracts Mean Nothing!

Though I would typically agree. If you sign a contract even if it includes you losing your life if you don't live up to it, then it is binding.

However, I do agree 100% that this lawsuit has brought many good changes to the industry. Changes that would have NEVER occured if left to the monopolistic companies.

These companies are charging these fees to retain customers. It has very little if anything to do with the cost of the phone so that argument is getting old. Phones cost to customers are inflated because of this type of thing. If they were sold in an open market and can be used on any carrier they would be pennies on the dollar compared to their price now.
mikeg803
join:2008-07-12
Columbia, SC

mikeg803 to canesfan2001

Member

to canesfan2001
said by canesfan2001:

said by pnh102:

So if I sign a contract and I don't feel like living up to my end of it, I can find a sleazy lawyer who can sue for me. Nice!
And end up getting a whopping....

21 million - 40% for the lawyers = 12.6 million / 70 million participants gives you:

$0.18!!!!

All that at cost of paying only one $175.00 ETF!
Kudos. The campbell class action suit a few years ago only got VZW customers a $3 bill credit. What's the point? People should should just push themselves to get more than a second grade education so that they can read their contracts.

Yougotit
@tds.net

Yougotit to pnh102

Anon

to pnh102
said by pnh102:

So if I sign a contract and I don't feel like living up to my end of it, I can find a sleazy lawyer who can sue for me. Nice!
Yep! You can sue away!!!

And those really 'nice' contracts that give the company all the rights and the customer and the pain would never give anyone reason to be upset with the poor little ole mom and pop cell phone company, riiiiight?
88615298 (banned)
join:2004-07-28
West Tenness

88615298 (banned) to pnh102

Member

to pnh102
said by pnh102:

So if I sign a contract and I don't feel like living up to my end of it, I can find a sleazy lawyer who can sue for me. Nice!
Oh yes to you all lawyers are sleazy until YOU need one then he is the "nice" one. Hypocrite.

So what you're sdaying is that companies should be able to not live up to THEIR part of the contract and people shouldn't have nay legal recourse? They should bend over and take it?
Radioman991
join:2001-09-24
Dayton, OH

1 edit

Radioman991

Member

Re: Contracts Mean Nothing!

said by 88615298:

said by pnh102:

So if I sign a contract and I don't feel like living up to my end of it, I can find a sleazy lawyer who can sue for me. Nice!
Oh yes to you all lawyers are sleazy until YOU need one then he is the "nice" one. Hypocrite.

So what you're sdaying is that companies should be able to not live up to THEIR part of the contract and people shouldn't have nay legal recourse? They should bend over and take it?
oops sorry for the double post

DoRight
join:2007-07-20
East Petersburg, PA

DoRight

Member

Re: Contracts Mean Nothing!

Yes.. I needed one a few years back and they did nothing for me and made thousands off me.. Most are a joke..
Radioman991
join:2001-09-24
Dayton, OH

Radioman991 to 88615298

Member

to 88615298
said by 88615298:

said by pnh102:

So if I sign a contract and I don't feel like living up to my end of it, I can find a sleazy lawyer who can sue for me. Nice!
Oh yes to you all lawyers are sleazy until YOU need one then he is the "nice" one. Hypocrite.

So what you're sdaying is that companies should be able to not live up to THEIR part of the contract and people shouldn't have nay legal recourse? They should bend over and take it?
As far as I am concerned, all lawyers are sleazy. The 21st Century version of the stereotypical used car salesman

pnh102
Reptiles Are Cuddly And Pretty
Premium Member
join:2002-05-02
Mount Airy, MD

pnh102 to 88615298

Premium Member

to 88615298
said by 88615298:

Oh yes to you all lawyers are sleazy until YOU need one then he is the "nice" one. Hypocrite.
So you can prove that I've hired a lawyer to file a BS lawsuit?
said by 88615298:

So what you're sdaying is that companies should be able to not live up to THEIR part of the contract and people shouldn't have nay legal recourse? They should bend over and take it?
Um, no. What I'm saying is that if someone agrees to a contract, they should not whine about being expected to hold up their end of it. In this case, they chose to sign a contract obligating them to an ETF and got charged it, what exactly is the problem here?

sholling
Premium Member
join:2002-02-13
Hemet, CA

1 edit

sholling to pnh102

Premium Member

to pnh102
You are completely missing the point. You don't have fifty competing services to choose from. In most markets you have four using the same anti-competitive tactics. I have no problem when a contract is used for a legitimate business purpose. For example if they give you $120 off the cost of a phone making you sign a two year agreement is legitimate. But the early termination fee is only legitimate if used to recoup the prorated discount given on the phone. Using it as a penalty to keep customers from moving to a lower cost/higher feature competitor is anti-competitive behavior. That's why the price of cell service remains high and how providers can get away with charging twenty cents for a tiny text message. Verizon's consistent mantra has been that they will never compete on price. An end to early termination penalties, while allowing a recoup of their investment (the phone discount), will force a change in that policy. And that's a good thing!

WiseUP101
@wellsfargo.com

WiseUP101 to pnh102

Anon

to pnh102
Why don't you just move to china then? Sounds like you need come to grips with a little thing called capitalism and a free market economy. Competition is what drives our economy, meaning we should have the ability to do business with whom ever, when ever we want, it is what this country is all about. Early termination fees are a crime. It's like Wal-Mart charging you $175 if you decide you want to shop at Target one day because they have something Wal-Mart doesn’t offer.

pnh102
Reptiles Are Cuddly And Pretty
Premium Member
join:2002-05-02
Mount Airy, MD

pnh102

Premium Member

Re: Contracts Mean Nothing!

said by WiseUP101 :

Why don't you just move to china then? Sounds like you need come to grips with a little thing called capitalism and a free market economy. Competition is what drives our economy, meaning we should have the ability to do business with whom ever, when ever we want, it is what this country is all about. Early termination fees are a crime. It's like Wal-Mart charging you $175 if you decide you want to shop at Target one day because they have something Wal-Mart doesn’t offer.
LOL why? I have cellular service with no contract.

spamd
Premium Member
join:2001-04-22
Cherry Valley, IL

spamd

Premium Member

Arbitration

My question is why wasn't mandatory arbitration there before all of this. Isn't this the standard now for companies with a large user base?

Well at least Comcast has a opt out form.

»consumerist.com/consumer ··· 2174.php

»Opt Out Of Comcast Arbitration [42] comments

»www.comcast.com/arbitrat ··· ult.ashx
EPS4
join:2008-02-13
Hingham, MA

EPS4

Member

Re: Arbitration

Hm, I haven't heard of wireless operators doing this?

But even if they did, at least in some states you can't legally sign away your rights to a class-action suit, so that part of the contract becomes unenforceable.

DannyBallZ
@charter.com

DannyBallZ

Anon

ETF Management

A carrier has a right to enforce a service agreement with a patron if they offer him/her a subsidized handset.

But carriers have gone beyond that when trying to force new contracts on customers changing pricing plans or porting their number back in during a win-back situation. This is where it becomes burdensome on the consumer.

The best thing for customers to do to avoid these problems is to educate themselves on wireless industry practices and carrier guidelines. Carriers should also be required to be upfront with their customers when enforcing new contract terms.

Carriers like VZW now force customers over the phone to verbally agree to new contract terms so that the customer can't say later on that they never agreed to it.

There are other options including prepaid, Flex Pay or regional carriers who offer full service without binding contracts.

Pro-rating or discounting ETF's are a start, but still leave room for improvement. I'd like to see ETF's based upon the actual hardware subsidy given. For example, if i pay $ 100 for a phone worth $ 200, then I feel my ETF should be $ 100. If I bring my own handset to a carrier for activation or pay full retail price for my phone, there should be no contract and no ETF applied to the consumer.

DMWCincy
join:2004-04-27
Fairfield, OH

DMWCincy

Member

Re: ETF Management

said by DannyBallZ :

There are other options including prepaid, Flex Pay or regional carriers who offer full service without binding contracts.
This is why my wife and I stick with our local telco's wireless service. No contracts to deal with. We call up every few months, work out a new deal on the phones and not have to deal with signing up for another 2 yrs. Its nice to know that I dont have to pay $175 to move to another service

Ben
Premium Member
join:2007-06-17
Fort Worth, TX

Ben to DannyBallZ

Premium Member

to DannyBallZ
Here's a better idea:

- No more contracts, month-to-month only. So no more ETFs.
- No more equipment subsidies by the carrier. Reduce monthly service fees.

To replace equipment subsidies, instead have banks offer loans for a small amount of money. There are numerous advantages to this:

- Rates are determined by credit worthiness, which I think is fair.
- More flexible. Want to pay the entire cost of the phone upfront and save money? Fine. Want to pay for the entire cost of the phone over time, for a little more money each month? Also fine.
- Rates can't stay high, since if another bank offers a better rate customers will go there.

snappakazoo
Inconceivable
join:2000-09-10
Montclair, NJ

1 recommendation

snappakazoo

Member

Everyone relax a bit

While I agree that Harold's case is extreme, most of us enter into these contracts knowing the terms. Let's keep in mind that if businesses don't make money, they will not offer new products, improve service and generally will not innovate. We live in a capitalist society. You may not like that Verizon is making money. And that money may be making the CEO rich, but it is also being reinvested in the network to make it better so they can compete.

As for lawyers, they are not all sleazy. And not even close to used car salesmen. Let's be realistic. You may not like lawyers, but they are a common force for change in this country.
Radioman991
join:2001-09-24
Dayton, OH

Radioman991

Member

Re: Everyone relax a bit

said by snappakazoo:

While I agree that Harold's case is extreme, most of us enter into these contracts knowing the terms. Let's keep in mind that if businesses don't make money, they will not offer new products, improve service and generally will not innovate. We live in a capitalist society. You may not like that Verizon is making money. And that money may be making the CEO rich, but it is also being reinvested in the network to make it better so they can compete.

As for lawyers, they are not all sleazy. And not even close to used car salesmen. Let's be realistic. You may not like lawyers, but they are a common force for change in this country.
Sorry, but I disagree. The legal system is next behind the other Government jobs program...all the assorted industries sucking blood from all of us via the tax system.

"Oh NO! I spilled my coffee! I deserve a MILLION!" Oh NO! My cell phone contract sucks! I want out...I'll SUE!!!!!. Lookie here, I WIN!! WEEEEEE!!!! Here Mr Shyster, here's your 40 %! I will take my quarter and go home happy!!!!!" "Oh NO!!! I got drunk and fell off my neighbor's porch! I will OWN his HOUSE!!!!!! oops...gotta sell it to pay the lawyers"

I have been sued, and had to waste 2 unproductive days in a courthouse...after 3 YEARS of depositions, BS, and useless crap from lawyers, I am slightly tainted.

Bring on the flames...or better yet, SUE ME!!!!!
SunnyFL8
Premium Member
join:2001-02-08

SunnyFL8

Premium Member

$21 million

After the Lawyers fees Hmmm, that leaves???

lohearn
join:2001-03-22
Merrimac, MA

lohearn

Member

They're the only carrier that works at my home.....

I switched to Verizon Wireless years ago as none of the other wireless services has cell reception at my home. I have been a Verizon Wireless customer for 5 years now. Every time I make a small change to my plan I have to agree to a new two year contract and it's annoying. They are my only choice, right now, but if one of the other companies ups their network and gets a signal at my house I may contemplate switching.

Two years ago next month I decided to add my son to our cell plan. To add him to our current plan was not an option with Verizon so we had to go with a whole new plan, and a whole new contract. When I balked at the new two year contract (I had already been a customer for 3+ years) I was told too bad. I would have loved to have left them but again, they're the game in town for me.

Now they're trying to get me to switch to another new plan and again would force me to sign a new two year contract, I told them NO WAY! I'll stick with my existing plan and I told them to switch me to a new plan would require them to give up the two year contract!