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California judge rules Sprint fees unlawful

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Alex
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PostPosted: Tue Jul 29, 2008 11:41 am    Post subject: California judge rules Sprint fees unlawful Reply with quote

Quote:
WASHINGTON (AP) — A judge has ruled that Sprint Nextel Corp. violated California law in how it charged customers for quitting service early.

Alameda County Superior Court Judge Bonnie Sabraw ruled Monday that Sprint will have to pay $18.2 million in cash to customers who sued over the fees and credit $54.7 million to those who were charged but did not pay the fees.

The judge also rejected Sprint's argument that federal law pre-empts California law on the case, a determination that is expected to have a broader impact on ongoing efforts at the Federal Communications Commission to regulate the so-called "early termination fees."


ouch.
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maverick
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PostPosted: Tue Jul 29, 2008 1:53 pm    Post subject: Reply with quote

They'll definitely try to appeal the case, especially since they've already tried using Federal laws to exempt them from California law.
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Fox McCloud
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PostPosted: Tue Jul 29, 2008 7:36 pm    Post subject: Reply with quote

I'd like to know further details on this case--as long as fraud isn't involved, I don't see why Sprint should have to pay a single dime--if a user abused the network and Sprint terminates them and forces them to pay a fee, well, then that should be ok--after all, it's Sprint's network.

But, again, I want to know the full details.
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Alex
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PostPosted: Tue Jul 29, 2008 9:07 pm    Post subject: Reply with quote

Fox McCloud wrote:
...I want to know the full details.


Quote:
California judge rules Sprint's cell phone fees unlawful, company must pay penalty

By PAUL ELIAS , Associated Press
July 29, 2008

SAN FRANCISCO - The fees that cell phone carriers charge customers who break service contracts took a big hit in a California courtroom when a judge said such charges by Sprint Nextel Corp. likely violate state law.

The judge, in a tentative ruling issued late Monday, said Sprint will have to pay $18.3 million to customers who sued over the fees and credit $54.8 million to those who were charged but did not pay the fees.

The same judge is considering other lawsuits against telecommunications companies over their so-called early termination fees, which can range from $150 to $225. This month Verizon Wireless agreed to pay $21 million to settle an identical lawsuit just as trial was starting.

Alameda County Superior Court Judge Bonnie Sabraw rejected Sprint's argument that a state court had no business deciding an issue the company said should be left for federal authorities. And while her ruling isn't legally binding outside the state, it cut to the heart of an ongoing debate in other state courthouses and in Washington, D.C., over the fairness of the fees.

The Federal Communications Commission is enduring intense lobbying over how best to handle the fees. Telecommunications companies have asked the FCC to regulate the fees and shield wireless companies from class action lawsuits in state courts, such as the one Sprint is poised to lose.

At a public hearing last month, FCC Chairman Kevin Martin sketched out a plan in which the cancellation fees would be reduced over the life of the contract. Three companies — T-Mobile, AT&T and Verizon Wireless — already do that and Sprint said it would begin prorating its fees next year.

Martin said he hoped the commission would make a decision in August.

FCC spokesman Robert Kenny declined to comment on the court decision specifically, but did say it wouldn't affect the agency's plans to address the issue.

Chris Murray, senior legal counsel for Consumers Union, said he hoped the California court decision would "drive a stake through the heart" of the industry's hopes for removing state courts and state regulators from having oversight over the fees.

Scott Bursor, a lawyer for the victorious Sprint customers, added that the "ruling sounds the death knell" for the industry's efforts before the FCC.

Sprint will get a chance to change Sabraw's mind at another court hearing. But it's unlikely the judge will alter her detailed, 37-page tentative ruling, which she issued after presiding over a two-week trial in June.

Customers of six telecommunications companies sued their carriers in 2006 in Alameda County Superior Court alleging that the fees violate California's unfair business practices law.

Wireless carriers say early termination fees are necessary so the companies can recover the cost of mobile phones, which they subsidize when customers sign long-term service contracts.

But the judge in her ruling said the contracts were "implemented primarily as a means to discourage customers from leaving" and that the company gave little regard to the cost of broken contracts.

"There was no evidence at trial that Nextel did a damage analysis that considered the lost revenue from contracts, the avoidable costs, or Nextel's expected lost profits from contract terminations," the judge wrote.

"We"re disappointed," said Sprint spokesman Matthew Sullivan, "but this is a tentative decision and we are focusing now on our response to the court."
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firedude
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PostPosted: Wed Jul 30, 2008 11:59 am    Post subject: Reply with quote

Imagine that. Shocked You would have thought they would have learned by example ie; Verizon?? Like they didn't follow that case closely. yeah right. Of course Sprint is disappointed. They thought they were able to pull one over. Seems there is some case law to refer to namely the NY AG's suit with Verizon. Just another way for sprint to try and refoup some of its losses. The courts don't seem to agree.
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Fox McCloud
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PostPosted: Wed Jul 30, 2008 2:04 pm    Post subject: Reply with quote

ridiculous--talk about a violation of private property rights.

It's Sprint's network, so they make the rules--you're given a contract to read over when you initially sign up; if you break the TOS in the contract then you abide by the penalties listed in the contract.

As long as Sprint isn't just canceling people to be canceling them (to earn some cash from those customer's who don't do much for them at all), then this should be a no matter....of course, California isn't exactly known for their individualistic stance on rights or private property either...
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jfulmer
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PostPosted: Wed Jul 30, 2008 2:10 pm    Post subject: Reply with quote

Fox McCloud wrote:

As long as Sprint isn't just canceling people to be canceling them (to earn some cash from those customer's who don't do much for them at all), then this should be a no matter....of course, California isn't exactly known for their individualistic stance on rights or private property either...


A contract is a two way street. I give you money. You give me services. If you change what services you give me, I'm no longer bound by the contract, and can walk away. It's as simple as that.
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firedude
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PostPosted: Wed Jul 30, 2008 3:37 pm    Post subject: Reply with quote

jfulmer wrote:
A contract is a two way street. I give you money. You give me services. If you change what services you give me, I'm no longer bound by the contract, and can walk away. It's as simple as that.


There ya have it. Wink

Let's see here. I'm going to sell you are very lucrative contract, then a few months later not deliver in accordance with said contract. Oh and by the way if you don't live by the contract we'll charge you. yes of course you have the ability to bail if you don't like it. ( for a period) We have to uphold to our end, so why not them? The fairest thing they could have done was like Verizon and honor their existing customers/contracts. Not fair?

Now the change was initially brought on through the rumor mill and even today Sprint still has accounts on line displaying unlimited way beyond the new TOS. Evidence of a business who is unprepared and subjecting their customers to covert business practices. A company that will tell you many different things depending on the day you call and who you talk to. Come on that is NOT good business.

I don't have a problem with them changing their service, but the way they so covertly went about it. Heck even their Master Agents didn't have a clue for a long time and they (Sprint) even sold unsuspecting customers unlimited accounts right up until the day they changed the TOS! Fair?

Sympathy? I have none.
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waynefoutz
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PostPosted: Thu Jul 31, 2008 6:42 pm    Post subject: Reply with quote

I'm going to have to side with Sprint on this one. The knee jerk reaction as a consumer is to applaud, but this is actually bad for the consumer. The wireless companies are handing out $300 phones at a reduced price, in some cases free, in exchange for a two year commitment. I don't see anything wrong with that, It gives people access to phones who otherwise wouldn't be able to afford them. This is just a case of a liberal judge telling the phone companies how to run their business. I hope this decision gets overturned.
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jfulmer
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PostPosted: Fri Aug 01, 2008 9:29 am    Post subject: Reply with quote

waynefoutz wrote:
The wireless companies are handing out $300 phones at a reduced price, in some cases free, in exchange for a two year commitment.


And how much of that $300 phone is a huge markup? Smartphones, yes, but even the pretty cheap phones are fairly pricey, *AND* in most cases you must use the phone blessed by the wireless company. Unlocked phones are not the norm.

And, by those same rules, if you have your own phone, you should be able to get service without an ETF. I may be wrong, but can you actually get service without a contract? If not, then the ETF is merely a tool to try to keep consumers from shopping around.
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AmazinglySmooth
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PostPosted: Thu Aug 07, 2008 2:16 pm    Post subject: Reply with quote

(1) Without the ETF, phone prices would higher initially, but eventually phone manufacturers would figure out how to lower the price to win more business.

(2) If the ETF is use to subsidize the phones, then it should decrease as the replacement value of the phone decreases.

(3) A more subtle point is that the user isn't told up front that they are paying each month for two different things: the service and the phone. Everyone knows it, but it isn't stated up front. I think this is why they phone companies are losing these cases.

Cheers
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MichiganTim
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PostPosted: Wed Sep 03, 2008 11:33 pm    Post subject: I think The Cellular prov. need to be bitch slapped Reply with quote

I think the Cellular providers are out of control and need to be bitch slapped. Why isn't congress/FCC allowing these guys to get away with this crap. What is the cellura companines sitting on capital hill with all of the special intrest groupes paying are government off. IT's time for americans to stand up, band togeather and say enough is enough. NEED A GRASS ROOTS EFFORT TO STOP THIS CRAP. Look what happened when all of the illigal mexicans prtotested in all of are major cities across america for amnesty. Congress actually debated weather or not they should be granted amnesty. If we all stood up and said enough is enough and protested in all of are majour cities, I wounder what congress would do then, when al of us stupid americans are saying enough is enough. You were elcted by me to look after my intrests not the coporate greed!

Corporate America is out of control!
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waynefoutz
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PostPosted: Thu Sep 04, 2008 6:07 pm    Post subject: Re: I think The Cellular prov. need to be bitch slapped Reply with quote

MichiganTim wrote:
I think the Cellular providers are out of control and need to be bitch slapped. Why isn't congress/FCC allowing these guys to get away with this crap. What is the cellura companines sitting on capital hill with all of the special intrest groupes paying are government off. IT's time for americans to stand up, band togeather and say enough is enough. NEED A GRASS ROOTS EFFORT TO STOP THIS CRAP. Look what happened when all of the illigal mexicans prtotested in all of are major cities across america for amnesty. Congress actually debated weather or not they should be granted amnesty. If we all stood up and said enough is enough and protested in all of are majour cities, I wounder what congress would do then, when al of us stupid americans are saying enough is enough. You were elcted by me to look after my intrests not the coporate greed!

Corporate America is out of control!


Tim,
I think the cap was a bad business decision. They had an opportunity to be different and they blew it. That being said, I highly doubt Sprint did anything illegal. It's their network, they are the ones that invested in it, built it, and pay people to maintain it. I'm sure they had a team of lawyers pour over that contract before they changed it. It's their house, we are just renting a room, we pretty much have to follow their rules or they can tell us to take our business elsewhere. My complaint with Sprint over this whole topic is the lack of communication and clarity behind it. We have usage meters that don't make sense, and you still to this day get a different story every time you contact Sprint and ask about this subject. Their employees are clueless. Two weeks ago, I checked my usage on the rollover date on my plan. I had used 80% of one gig while I was sleeping and the laptop was turned off. When I called in and inquired about it, the tech told me to get the "unlimited plan" so I wouldn't have to worry about it.
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MichiganTim
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PostPosted: Thu Sep 04, 2008 7:46 pm    Post subject: Reply with quote

Here is my point:
1. Have you ever signed a contract to lease a car, and the automaker changes the terms of the lease at your expense.
2. Have you ever sighned a contract for a morgage to have the bank change the terms of the morgage, at your expense. ( I am not talking about ARMS).

My point is I have never heard of a contract out side of the cellular industrry that has the right to take things that were promised at the begining for the same price.

My Opninion: THIS IS CORRUPT behavior. I did not sign this contract to have sprint tell me that I have to now abide to a 5gig cap. Which this is ludicrous. This cap is for the stone age. Let alone they don't even offer me a choice of other plans for a higher $ amount, Which would take some of the sting out of this issue. I think it's wrong, and this practice should come to an end. Give me 50 gig a month. I am not asking for the comcast 250Gig. GIVE ME OPTIONS instead of slamming the door in my face!

I just don't understand how they can get away with writing these contracts like this!
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AmazinglySmooth
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PostPosted: Fri Sep 05, 2008 1:53 pm    Post subject: Reply with quote

While I don't disagree with your premise, the contract is available to be read before you sign up. It does state that you are agreeing to accept any future changes after a 30 day notice period during which you can break the contract without penalty. You already agreed to this whether you wanted to or not. Also, the only laws concerning contracts have to do with other unrelated issues. Basically, for housing or cars a contract change would result in you being able to return the hourse or car without making any more payments--I don't think the counter party would want these things back. Service contract are different from asset contracts in this regard.

Regardless, you have a way out. I don't think you can successfully argue that this service is required for your health or safety so I doubt the government will be involved.

MichiganTim wrote:
Here is my point:
1. Have you ever signed a contract to lease a car, and the automaker changes the terms of the lease at your expense.
2. Have you ever sighned a contract for a morgage to have the bank change the terms of the morgage, at your expense. ( I am not talking about ARMS).

My point is I have never heard of a contract out side of the cellular industrry that has the right to take things that were promised at the begining for the same price.

My Opninion: THIS IS CORRUPT behavior. I did not sign this contract to have sprint tell me that I have to now abide to a 5gig cap. Which this is ludicrous. This cap is for the stone age. Let alone they don't even offer me a choice of other plans for a higher $ amount, Which would take some of the sting out of this issue. I think it's wrong, and this practice should come to an end. Give me 50 gig a month. I am not asking for the comcast 250Gig. GIVE ME OPTIONS instead of slamming the door in my face!

I just don't understand how they can get away with writing these contracts like this!
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