Verizon agrees to pay $21 million to settle suit over early termination fee

Verizon agrees to pay $21 million to settle suit over early termination fee
Verizon has decided to settle a class action suit filed in California over its early termination fee, and the Appeals Court has upheld the refund. As a result of the settlement, 175,000 members of the class will share the $21 million dollars that the carrier has agreed to pay to settle the case. Scott Bursar, the lead attorney for the plaintiffs, probably had to keep a smile from forming on his face when he said, ""Yesterday's ruling by the Court of Appeal confirms that this is a terrific settlement for Verizon Wireless customers, and now more than 175,000 of those customers will get a substantial refund."A spokesman for Verizon said that the settlement ends all litigation against its ETF, but is not related to the carrier's current ETF policies. As we reported, in November, Big Red doubled the ETF on certain "advanced devices like smartphones and netbooks. Carriers have defended charging these fees as a way to protect itself while still being able to offer the latest and greatest phones at subsidized prices that most can afford. Without the fee, if a customer broke his contract, a carrier would be on the hook for the full wholesale price of a phone with no income to offset the cost. Last month, AT&T raised its ETF for smartphones and netbooks to $325 from $175. Most carriers now pro-rate the ETF, charging the customer a fee that varies depending on how much time is left on the contract. The settled case with Verizon dealt with a flat $175 fee that the carrier had charged certain customers back in 1999. Each class member will receive $87.50 after lawyers take their share.

source: WSJ via FierceWireless




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23 Comments

1. networkdood

Posts: 6330; Member since: Mar 31, 2010

AT&T has had recently similiar frivilous lawsuits like Verizon went through. Yes, these are big companies, but people know what they are getting into and look to profit from it. Typically a customer was buying an iphone and breaking contract for around 175 or less and selling it on EBAY to make a profit. AT&T lost money - now smartphones are 325.00 and 10.00 declining each month, so it makes it a less appealing option for someone looking to make a buck to opt out early. Carriers will waive fees if after quite a few attempts the service issue cannot be resolved. Still, these lawsuits only benefit the lawyers involved and are a waste of resources and time. Just like the new one with those idiot customers suing apple and AT&T.

12. wade1968

Posts: 224; Member since: Apr 12, 2010

If the goverment,of the U.S.A, had not deregulated the phone companies. the giant yearly price increases,would not be happening.

15. YouLostTheGame

Posts: 441; Member since: Dec 11, 2008

Yeah, that's solves everyone's problems...let the gov't handle EVERYTHING for you. Would you like the gov't to tuck you in at night with a warm glass of milk too?! Government regulations are exactly why the world's economies are up shit's creek right now!

2. Truth

Posts: 62; Member since: Jul 15, 2009

I prefer the previous $175 termination fees. I buy smartphones though, so I would.

11. wade1968

Posts: 224; Member since: Apr 12, 2010

I like how you think truth. Verizon needs to sit down and look at its' current rules,for early termination fees. Make a better rule that works for everyone.

14. PapaJay224

Posts: 866; Member since: Feb 08, 2009

There is, its called SwiftView, it shows the actual signature you signed with at the time you received your contract. Proving you signed and agreed to the terms and conditions. You cant make everyone happy, but you can prove they knew what they were doing when they were in the store.

21. wade1968

Posts: 224; Member since: Apr 12, 2010

I agree with you. Problems is over time your signature changes,because of the pain that developes in a persons hands.

3. tallica05

Posts: 93; Member since: Dec 26, 2009

Chump Change to verizon...

7. Fanboys Suck

Posts: 609; Member since: Dec 12, 2008

You are right... They are gladly paying 21 Mil because its chump change... lol

4. jpropin

Posts: 152; Member since: May 20, 2010

After the lawyers get their slice, what will that add up to for each person? About $6.78? As for Verizon, $21 mil is petty cash. They can make that up later on when The Droid Mk 7 is released. If it worked every time Deep Purple changed their band line-up, it'll surely work for Big Red!

8. networkdood

Posts: 6330; Member since: Mar 31, 2010

"Each class member will receive $87.50 after lawyers take their share." Read the article you shall receive thine answer in full....

9. remixfa

Posts: 14605; Member since: Dec 19, 2008

petty cash? that money would otherwise be reinvested into other things. The network, employee benifits, ect ect ect. Companies dont just pile money into a vault and swim in it. Money is constantly reinvested. Would you like judge to force you to pay 10,000? is that petty cash? or did you already have other uses for that money?

10. jpropin

Posts: 152; Member since: May 20, 2010

Verizon has the monetary and legal resources to fight anything that comes their way. They decided to settle. Verizon will go on and survive and thrive. The average scmuck off the street pulling down 40 g's a year has no ability to fight back or settle when the judge forces them to pay $10,000. For him or her it could very well mean financial ruin Non-comaparable

19. CRICKETownz

Posts: 980; Member since: Oct 24, 2009

Well, apparently Verizon Wireless is the Scrudge McDuck of the wireless industry and all they do is swim in the money...accordin to these posters that think they just have 21 mil to blow.

5. pingpong

Posts: 145; Member since: Mar 28, 2010

So why was Verizon sued in the first place? Was there 175,000 people that felt they were tricked into a contract or something?

6. jpropin

Posts: 152; Member since: May 20, 2010

Why does anybody get sued these days? Answer.....Cause they can be.

13. networkdood

Posts: 6330; Member since: Mar 31, 2010

People cry and whine and when they do it enough then they get their lawyer, any lawyer, involved. The 175 ETF is fair - the 300-350 smartphone contract term fee is fair as those phones typically cost over 400.00 retial. My ARIA is 380 retail, so not a great deal for me, but for iphones at 499-699, the ETF is a bigger deal - look, this is a fake issue - if you sign the contract and do not want to read the terms and conditions, then I have no sympathy for you. These phones are luxury items and no one forced you to buy the damn thing - same goes to the idiot whiners who bought the iphone 4.....whew....next subject please, PHONEARENA.

16. SBrown

Posts: 9; Member since: Jul 02, 2010

I completely agree.

17. jpropin

Posts: 152; Member since: May 20, 2010

Regardless of how you slice it, it's great to be a lawyer in this deal. They'll slice up what? Close to a cool 6 MIL? The $87.50 each class member gets won't even be enough for most them to even pay one months worth of cell service! If they got it back in 1999 where this dates back to, they'd of been able to pay the bill and still take the kids out for ice-cream!

18. sprintguy09

Posts: 79; Member since: Apr 17, 2010

wow a whole $120

20. CRICKETownz

Posts: 980; Member since: Oct 24, 2009

So why was there a suit filed against Verizon again? Now we all are pretty knowledgeable about the current ETF policies and how they work, but according to the article this was about an issue back in 1999 which i'd assume the ETF was $175 at the time. So what we have is a bunch of Californians claimin to not have been aware of the ETF for the 2 yr. contract that they signed (which clearly states in the contract that you sign) that there would be a ETF and what do they mean "certain customers"? I must be missin something here. Most American consumers think the idea of a 2 yr. contract is ridiculous. Now if the tide switched and US carriers followed some of the trends of Int'l carriers and did no contract but charged full retail cost for the phone with no 2 yr. pricing option then there would more bitchin. Then i'm sure there would be another class action suit filed on why carriers don't offer 2 yr. contracts. Some consumers are like homeless people, always wantin a hand out.

22. networkdood

Posts: 6330; Member since: Mar 31, 2010

They want a free phone and no fee - they should buy a gophone...

23. DDTKC

Posts: 1; Member since: Jul 06, 2010

I AGREE! PEOPLE ARE ALWAYS WANTING SOMETHING FOR NOTHING! I SEE PEOPLE ALL THE TIME COMING INTO THE STORE AND WANTING ONLY THE FREE PHONES-NOT CARING IF THEY ARE DECENT QUALITY OR NOT. THEN WONDER WHY THEY HAVE POOR RECEPTION OR OTHER PROBLEMS. THERE IS NO WAY TO MAKE EVERYONE HAPPY-SOME DO HOWEVER TO IT TO THE EXTREME!

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