Settlement Reached in Verizon Suit

It seems like the class action suit involving cell phone users unhappy with Verizon Wireless’s astoundingly high early termination fees has been going on forever, but an Associated Press report reveals that there is finally an end in sight. The lawsuit, which was filed jointly by a number of customers in California, reached a turning point when Verizon Wireless recently agreed to pay a settlement of $21 million.

The settlement is not complete just yet; attorneys in the case admit that a lot of the details still need to be discussed, not to mention the need to have them authorized by a judge of the Alameda County Superior Court.

An attorney for the plaintiffs in the case explains that his clients will simply be “recovering” money that they paid out to Verizon in order to terminate their contracts before the end of service date. He also revealed that he does not yet know how many of Verizon’s former customers will be able to share in the settlement money – that is yet another thing that will be up to a judge to decide.

With cell phone companies charging anywhere between $150 and $225 when customers terminate their contracts early, it is little wonder that Verizon Wireless has not been the only company sued on the basis of exorbitant fees. Six other companies were sued in Alameda County alone in 2006.

The Sprint Nextel Corporation was one of them; the case went to court just last month, though the judge in that case has not yet given her decision. AT&T is scheduled to go before court next.

It appears that customers are not the only ones fed up with outlandish early termination fees. As of late, the Federal Communications Commission has been forming plans to regulate such charges, namely because they are not sure that the settlements decided in these cases are going to provide adequate compensation to angry former customers. For the most part, cell phone companies seem to support the FCC’s plans, because doing so will make them immune from lawsuits filed in individual states in the future.

(July 12, 2008)