Cell phone users fight contract fees

Jeff Tyler May 22, 2008
HTML EMBED:
COPY

Cell phone users fight contract fees

Jeff Tyler May 22, 2008
HTML EMBED:
COPY

TEXT OF STORY

Scott Jagow: What’s the most annoying thing about cell phone companies? It’s probably gotta be those contracts and the penalties. Well, things might change on that. Jeff Tyler explains.


Jeff Tyler: Cell phone providers say it’s only fair to charge customers up to $175 when they cancel their contracts early. Companies say the fees cover the costs of all those cut-rate phones.

That’s not how Bob Williams with Consumers Union views the fees:

Bob Williams: These are used by the phone companies as a way to keep their customers locked up.

Dissatisfied customers have filed class-action lawsuits in several states. The industry wants the Federal Communications Commission to give it immunity.

Again, Bob Williams:

Williams: It would give them billions of dollars in protection. In California, Cingular, not so long ago, had to give people their early termination fees back under.

In return for legal protection, the phone companies would let customers drop cell phone service in the first month without penalty. After that, any cancellation fees would be prorated.

Williams says the industry isn’t giving up much. Some companies, like Verizon, already offer these services.

I’m Jeff Tyler for Marketplace.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.