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story category Verizon Faces Largest-Ever Class Action
Those early termination fees will get you every time
(old news - 08:17AM Thursday Jan 31 2008)
tags: legal · business · wireless · trouble · consumers · Verizon Wireless Broadband
Tipped by djeremy See Profile
As a result of its early termination fees, Verizon Wireless is facing what is being called “the largest class action lawsuit ever”. The case has been building for four years but reached a milestone victory recently when it appeared in front of the American Arbitration Association in New York and was given the green light to proceed. The lawsuit could result in refunds of $1 billion across the 70 million people who have been affected by Verizon’s $175 ETF. The trial should head to the courtroom in late 2008.

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Forums » Verizon Faces Largest-Ever Class Action
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supergirl

join:2007-03-20
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ETFs

They should go down in price as your contract does.

Now, if you have to pay full price for the phone, there shouldn't be a ETF period. Hope they win since this would affect all these "contract" crazy companies that even have contracts for no reason.
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ztmike
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ETF standard?

I thought the ETF was standard? All cell companies have a ETF, whats this lawsuit about?

1 billion..that's a shit load of money..lol
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sousademiami

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Miami, FL
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edit:
January 31st, @10:37AM

Re: ETF standard?

said by ztmike See Profile :

I thought the ETF was standard? All cell companies have a ETF, whats this lawsuit about?

1 billion..that's a shit load of money..lol
I did the math..70 million people at $175 each is $12 billion! Seems like they're not asking for enough!
newyorkslick

join:2001-12-19
Rosedale, NY


edit:
January 31st, @08:35AM

Tough

I'm sorry, but if you sign a contract that requires you pay a fee if you terminate your contract before the agreed upon time, then you should abide by that contact. If not, pick another carrier.

Problem is, almost every carrier has the provision.
I hope things change.

N3OGH
They both suck, we're so screwed
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edit:
January 31st, @09:21AM

Re: Tough

said by newyorkslick See Profile :

I'm sorry, but if you sign a contract that requires you pay a fee if you terminate your contract before the agreed upon time, then you should abide by that contact.
Unless it's determined that contract is illegal.

An illegal contract is null and void the moment it's signed.

Example:

You enter into a contract with me to "dispose" of your 2007 Isuzu Honcho because you can no longer make the payments. You pay me with a crate of Valencia oranges and a gross of "Magnum" condoms for this service. I take receipt of your citrus and jimmy hats as payment for service and never provide said service (hey, with all that orangy goodness and protected McLovin', who would?).

You turn around and decide to sure me in small claims court for me not providing the service. You can't. It's an illegal contract from the start.

I know it's an exaggerated example, but I wanted to somehow work citrus fruit, mention of the publication "Honcho" and a box of rubbers into one of my posts some day.

I'm just glad that dream came true......
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moderated:
January 31st, @12:38PM

said by newyorkslick See Profile :

I'm sorry, but if you sign a contract that requires you pay a fee if you terminate your contract before the agreed upon time, then you should abide by that contact. If not, pick another carrier.

Problem is, almost every carrier has the provision.
I hope things change.
Yeah, and when am I going to hear you mention the companies never abide by their OWN fucking contracts in the first place?

Good on the People.

TVD

@verizon.com

moderated:
February 2nd, @09:40AM

Re: Tough

Good on the People...right

Now these fuckers are going to cause me to pay $250 for a new phone, rather than getting a free phone every 2 years.

Think before you reply.
Ahrenl

join:2004-10-26
North Andover, MA

moderated:
February 2nd, @09:41AM

Re: Tough

You already pay that $250 in your bloated contract fees.
BF69

join:2004-07-28
Camden, TN


edit:
January 31st, @12:14PM

said by newyorkslick See Profile :

I'm sorry, but if you sign a contract that requires you pay a fee if you terminate your contract before the agreed upon time, then you should abide by that contact. If not, pick another carrier.

Problem is, almost every carrier has the provision.
I hope things change.
So if they contract say left handed people aren't allow to use their service that's ok because it's in the contract? there are some things that shouldn't be allowed in contracts.

JE
Can I Taste It? Mmmm
Premium
join:2000-12-15
Brooklyn, NY

edit:
January 31st, @08:43AM

OH YEAH!

I hope these people win because it would set an Industry standard, and maybe this will be the beginning of the end of ETF's for cellular providers, or @ least a set minimum of maybe $50.00 LOL

JE

brooklynman4

join:2004-09-07
Brooklyn, NY

Re: OH YEAH!

Well if its building for 4 years i guess they have there money ready to settle just like big companies.

TK Junk Mail
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said by JE See Profile :

I hope these people win because it would set an Industry standard, and maybe this will be the beginning of the end of ETF's for cellular providers, or @ least a set minimum of maybe $50.00 LOL

JE
The std practice has already changed with the ETFs reducing over the length of the contract,

In 2006, Verizon took steps to soften the blow of early termination fees by implementing a proration plan for ETFs. The plan takes money off the total fee for each month of your contract you serve, so you are not hit with a full fee for terminating late in your contract. Competitors T-Mobile USA Inc., Sprint Nextel Corp. and AT&T Mobility also announced similar proration schemes.

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pnh102
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Re: OH YEAH!

said by TK Junk Mail See Profile :

The std practice has already changed with the ETFs reducing over the length of the contract,
Since when has rationality ever factored into how lawyers do things?
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BabyBear
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Re: OH YEAH!

said by pnh102 See Profile :

Since when has rationality ever factored into how lawyers do things?
Or contracts written completely by one side with no input from the other.

pnh102
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Re: OH YEAH!

said by BabyBear See Profile :

Or contracts written completely by one side with no input from the other.
Last I checked nobody holds a gun to one's head to agree to any cell phone contract. You can get cellular service without a contract if you like. Pay for the phone or go with prepaid service and you have no contract at all to deal with.
--
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Ahrenl

join:2004-10-26
North Andover, MA

Re: OH YEAH!

Without knowing what the actual complaint is, I think you're jumping the gun. Is it that the ETF is there at all? Or is that they were charged the ETF even though the contract was materially changed before hand.

Fed_Up

@rr.com

Part of the problem is that the cell-phone carriers can arbitraily change the terms of the contract without notice....if you call to make a small change to your calling plan, they can extend your contract for another 2 years from the date of that minor plan change. So, if you make a change 3 months before your contract end-date, they now extend the plan for an additional 2 years. YOU NEVER WIN!
lawrence171
Evilly Yours - Evilness

join:2001-12-24
Canada
·Acanac Inc.

said by JE See Profile :

I hope these people win because it would set an Industry standard, and maybe this will be the beginning of the end of ETF's for cellular providers, or @ least a set minimum of maybe $50.00 LOL

JE
They'll be forced to switch to the model being used in Asia.

Cell phones will bee purchased at full price, and monthly fees will be low. Either way, the providers make money because they'll then sell you the phones will a high mark up.
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Kramer
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Verizon Needs to do the Right Thing

Prorating the remaining contract term seems like the reasonable thing to do at the very least. I would very much be in favor of a federal law prohibiting or limiting these contracts to one year for everything from cell phones, to Internet service to business telephone service. These contracts serve one and only one purpose and that is to limit competition. If the contract serves to subsidize a discount, then let the discounts disappear. Of course this wouldn't happen because if these companies provided good service and good equipment at fair prices, they would keep their customer's loyalty. The sad thing in this case is that Verizon does provide good service and does command good customer loyalty and they have lead the way in being more reasonable with these contracts, by prorating them. Verizon should lead the way again and do completely away with contracts. As far as the lawsuit, Verizon should penny up and pay all these people it has ripped off in the past. There is absolutely no justification for charging someone $150 to cancel a contract 23 months into a 24 month term. They corrected the problem and now they need to do the right thing.

aaron8301
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Re: Verizon Needs to do the Right Thing

said by Kramer See Profile :

These contracts serve one and only one purpose and that is to limit competition...
...Verizon does provide good service and does command good customer loyalty...
...As far as the lawsuit, Verizon should penny up and pay all these people it has ripped off in the past.
You kind of contradict yourself there. If Verizon commanded good customer loyalty, they wouldn't require 2-year contracts, and they wouldn't be getting sued by people they ripped off.
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And the winners are......

the lawyers who will get 90% of any settlement and the users will get a 25 dollar verizon gift credit

KSkipp

@verizon.net

Re: And the winners are......

P Ness, YOU are the winner for that comment. Awesome!!

pnh102
Reptiles Are Cuddly And Pretty
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Mount Airy, MD

Waste of Legal System

A class action lawsuit over $175?

Come on. If you can afford paying $50 or so a month for cell phone service, then paying an ETF should be no big deal.

I hope the members of this class enjoy their $10 Verizon coupons.
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Julio
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Re: Waste of Legal System

even if the carrier is at fault for you wanting to cancel?

kfsutops
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Re: Waste of Legal System

said by Julio See Profile :

even if the carrier is at fault for you wanting to cancel?
Yeah. Exactly. I am reading these an thinking, "Why is this such a bad thing."

The reality is that Verizon provides you with crappy service, dropped calls, non-responsive customer service and "you"
have to pay to get out of the contract.

What's wrong with that picture? Shouldn't they have some responsibility too?

I agree you sing a contract. As someone said earlier, doesn't mean it is a legal contract.
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pnh102
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edit:
January 31st, @09:59AM

Re: Waste of Legal System

said by kfsutops See Profile :

The reality is that Verizon provides you with crappy service, dropped calls, non-responsive customer service and "you"
have to pay to get out of the contract.
Verizon, and just about every other cellular carrier, gives you a trial period where you can test drive the service. I know that not every cell phone company works well everywhere, but if you decide to try Verizon and find that their service sucks where you use the phone the most, and you don't cancel at the end of the trial window, who's fault is that?
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reelbigfish

join:2002-06-06
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Re: Waste of Legal System

How about the situation of me moving from one state to another. Verizon had acceptable service at my old house, but when I got to my new state I had shaky service at home and barely any coverage at work. I complained over and over, and they kept saying we have coverage in the area. Well, great, it's over some big hill and for some reason standing in the parking lot I get no bars and constantly dropped calls. They still made me pay the ETF despite horrible service as they had "service" in the area according to their map.

pnh102
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edit:
January 31st, @10:18AM

Re: Waste of Legal System

said by reelbigfish See Profile :

How about the situation of me moving from one state to another.

...

They still made me pay the ETF despite horrible service as they had "service" in the area according to their map.
But you agreed to pay the ETF when you signed the contract.

The only basis for this silly case is that the "victims" did not like paying an ETF that they agreed to pay if they broke their contracts. Unless Verizon did something shady, I see no point of the lawsuit, and it would be nice if a wise judge threw it out.
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phantom6294

join:2002-02-27
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said by pnh102 See Profile :

Verizon, and just about every other cellular carrier, gives you a trial period where you can test drive the service. I know that not every cell phone company works well everywhere, but if you decide to try Verizon and find that their service sucks where you use the phone the most, and you don't cancel at the end of the trial window, who's fault is that?
True, but (before they went to prorated ETFs) what happens when 6 months into a 2-Year contract, you have some problem (they start having billing errors every month and make your life miserable to get it fixed, the quality of your signal goes to the pits where you live, etc, etc, etc). What then? If the company does not provide a reasonable level of customer support, what is one to do? Yes, a contract was signed... but um, it's a two party contract... the customer and the company. If the company isn't performing to a reasonable standard, shouldn't the customer be able to terminate the contract without said ETF??? Obviously, the problem becomes defining "reasonable level of support/service."

At one time I had Cingular and had about 6 or 7 months left in my contract. I started getting weird and erroneous billing emails about an expiring credit card for my auto-pay. Come to find out, when I moved my service from one state to the next, they created a new account but never flushed the old account of auto-pay data (card wasn't being charged at least). I said I felt uncomfortable that Cingular was storing my credit card data in an unused and inaccessible account and asked how long it takes it flush said data out of the system. I was specifically told 12 months. Well, guess what, it had been 14 months. The CSR (actually I was already talking to a supervisor) started back pedaling, trying to change his story. In short, I was blatantly lied to. When I confronted the supervisor's supervisor, she didn't care. My next call to Cingular was to cancel my service. It cost me the ETF, but I more than made it up in not paying Cingular ~$50 for 6 or 7 months.

I am now a Verizon Wireless customer and have been a little over 2-years. When my contract expired, I bought a new phone at full price and did not renew my contract. I find some of the businees practices of Verizon Wireless to be unethical, but no more so than any other wireless company. Verizon Wireless' network has been great for me so I have no desire to switch companies. However, I will not be beholden to the company.

kfsutops
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said by pnh102 See Profile :

Verizon, and just about every other cellular carrier, gives you a trial period where you can test drive the service. I know that not every cell phone company works well everywhere, but if you decide to try Verizon and find that their service sucks where you use the phone the most, and you don't cancel at the end of the trial window, who's fault is that?
What does a trial period have to do with anything? I get 30 days, then they get 2 years or I have to pay them extra.

Early termination fees she be abolished all together. With this fee the cell phone carriers know they have you locked in so they provide crappy service. Cell phone companies rank right up there with the cable companies.
--
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pnh102
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Re: Waste of Legal System

said by kfsutops See Profile :

What does a trial period have to do with anything? I get 30 days, then they get 2 years or I have to pay them extra.
30 days should be plenty of time for someone to decide if the cell phone service they agreed to works. Heck, you could probably determine in a matter of hours if the service you chose works where you use the phone the most or not.

Just because the ETF sucks doesn't mean you can get out of paying it if you agreed to pay it.
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kfsutops
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Re: Waste of Legal System

said by pnh102 See Profile :

30 days should be plenty of time for someone to decide if the cell phone service they agreed to works. Heck, you could probably determine in a matter of hours if the service you chose works where you use the phone the most or not.

So what you are really saying is that Verizon only have to live up to their end of the bargain for 30 days. While the consumer has to live up to their end for 2 years.

I never disputed whether someone signs for it then they should pay for it. I agree to an extent with that.

But, there is a difference between a lawful contract and an unlawful contract. This is what this case will be about. No whether someone signed an a contract.
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pnh102
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Re: Waste of Legal System

said by kfsutops See Profile :

So what you are really saying is that Verizon only have to live up to their end of the bargain for 30 days. While the consumer has to live up to their end for 2 years.
Yes.
said by kfsutops See Profile :

But, there is a difference between a lawful contract and an unlawful contract. This is what this case will be about.
But that would only be true if ETFs were illegal.
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elvey
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said by pnh102 See Profile :

Verizon, and just about every other cellular carrier, gives you a trial period where you can test drive the service.
These are bullshit. I trialed cingular/AT&T service and returned the phone and cancelled within a week. They refused to cancel the service, didn't refund $35 of what I paid for the phone and sent me bills for 5 months. Yes, I kept a detailed record of the zillion phone calls it took to get it resolved.
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pnh102
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Re: Waste of Legal System

said by elvey See Profile :

I trialed cingular/AT&T service and returned the phone and cancelled within a week.
And there are many who did cancel and had no problems at all. No system is perfect, but one bad experience doesn't mean the whole system is screwed up.
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kfsutops
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Let it go. He is astroturfing.

pnh102
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Re: Waste of Legal System

said by kfsutops See Profile :

Let it go. He is astroturfing.
How? I don't procure any products or services from Verizon.
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pnh102
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said by Julio See Profile :

even if the carrier is at fault for you wanting to cancel?
If a carrier cancels you, then you are not legally entitled to pay the ETF.
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Julio
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Re: Waste of Legal System

said by pnh102 See Profile :

said by Julio See Profile :

even if the carrier is at fault for you wanting to cancel?
If a carrier cancels you, then you are not legally entitled to pay the ETF.
When was the last time you heard of a carrier canceling because they provide you with crappy service? They usually will cancel you only if you cost more money to have you on their service than from what you pay them for your service. Plus, if they cancel where is my ETF money then?
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pnh102
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Re: Waste of Legal System

said by Julio See Profile :

Plus, if they cancel where is my ETF money then?
Did they agree to pay you one if they cancelled you? If so, you might have a case against them.
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kingofdsl

join:2002-12-11
Afton, OK

Re: Waste of Legal System

said by pnh102 See Profile :

said by Julio See Profile :

Plus, if they cancel where is my ETF money then?
Did they agree to pay you one if they cancelled you? If so, you might have a case against them.
The lawsuit could result in refunds of $1 billion across the 70 million people who have been affected by Verizon’s $175 ETF

Woo hoo a whole $1.75 cent refund after lawyers fees.

pnh102
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Re: Waste of Legal System

said by kingofdsl See Profile :

Woo hoo a whole $1.75 cent refund after lawyers fees.
Actually if Verizon plays this right it could make a hefty profit. Instead of cutting checks for $1.75 or whatever, they will give out $1.75 coupons which are valid only if you purchase another service from Verizon. So many people will use these coupons and pay extra for the service that Verizon would more than make its money back after paying lawyers.
--
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Fed_Up

@rr.com

Re: Waste of Legal System

Now THAT would actually be illegal. In a class-action suit, Verizon cannot choose the terms of their panalties...DUH!

RickNY
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·Optimum Online

said by pnh102 See Profile :

If you can afford paying $50 or so a month for cell phone service, then paying an ETF should be no big deal.
Gotta love when people respond to stuff with this stupidity.. Thats the same thing as saying "If people can afford $1000 a year for car insurance, then paying $3500 as a penalty for switching companies should be no big deal."

See 6 replies to this post
averagedude

join:2002-01-30
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·Cox HSI

$175 in and of itself may not be a bad thing....
What happens when you have a family plan of 5 phones?
5 x $175 = $875 !!!!
Now that is a lot of money, at least it is to me.

My issue is with the cell phone companies re-setting the 2 year contract date so that it is a perpetual contract.

There should not be a contract when you paid full price for the phone or brought your own phone with you.

pnh102
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Re: Waste of Legal System

said by averagedude See Profile :

$175 in and of itself may not be a bad thing....
What happens when you have a family plan of 5 phones?
5 x $175 = $875 !!!!
Now that is a lot of money, at least it is to me.
That is a lot of money. Do you really believe that the $10 Verizon coupons you'd get as a result of this settlement will make up for $875? But again, just because people don't like a legally permissible fee doesn't mean they should be exempt from the fee if it comes time to pay it.
said by averagedude See Profile :

My issue is with the cell phone companies re-setting the 2 year contract date so that it is a perpetual contract.

There should not be a contract when you paid full price for the phone or brought your own phone with you.
Well... that solves this problem then. There are also other ways to get cell phone service without contracts. Pre-paid phones are great for that.
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BabyBear
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join:2007-01-11

Re: Waste of Legal System

said by pnh102 See Profile :

That is a lot of money. Do you really believe that the $10 Verizon coupons you'd get as a result of this settlement will make up for $875? But again, just because people don't like a legally permissible fee doesn't mean they should be exempt from the fee if it comes time to pay it.
Don't think any 'settlement' ever makes up for the 'loss'. A 'judgement' perhaps has more of a chance. Course any member not satisfied with the settlement is able to opt-out and seek relief on their own.

It's the legality of the fee and its basis is what will be ruled on, assuming verizon doesn't just settle.

pnh102
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Re: Waste of Legal System

said by BabyBear See Profile :

Don't think any 'settlement' ever makes up for the 'loss'. A 'judgement' perhaps has more of a chance. Course any member not satisfied with the settlement is able to opt-out and seek relief on their own.
True. But I don't think we will see anyone suing Verizon for $175. Like I said before, these class action lawsuits are nothing but enrichment for lawyers and scraps for the "victims."
said by BabyBear See Profile :

t's the legality of the fee and its basis is what will be ruled on, assuming verizon doesn't just settle.
Unless states or Congress make ETFs illegal, any ruling against Verizon that invalidates the ETF will almost certainly be overturned on appeal because the basis for the ruling will essentially be that the judge doesn't like ETFs. Of course, simply not liking a business practice is not grounds for overturning it.
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Alakar
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Re: Waste of Legal System

said by pnh102 See Profile :

said by BabyBear See Profile :

Don't think any 'settlement' ever makes up for the 'loss'. A 'judgement' perhaps has more of a chance. Course any member not satisfied with the settlement is able to opt-out and seek relief on their own.
True. But I don't think we will see anyone suing Verizon for $175. Like I said before, these class action lawsuits are nothing but enrichment for lawyers and scraps for the "victims."
said by BabyBear See Profile :

t's the legality of the fee and its basis is what will be ruled on, assuming verizon doesn't just settle.
Unless states or Congress make ETFs illegal, any ruling against Verizon that invalidates the ETF will almost certainly be overturned on a