Cell Phone Providers Lowering Termination Fees

According to Newsday, that long awaited day has finally arrived – many of the big name wireless providers are finally cutting the exorbitant fees usually charged for early terminations and cancellations.

This has been in the works for quite time, as cell phone users get increasingly tired of having to pay fees as high as $200 for canceling their contracts early. Just recently, former users have been getting so fed up with these fees that they have taken the issue to courts. Even those cell phone users who have not filed suit are given to complaints and cries for a little relief. In 2006 and 2007 alone, Newsday reports that the Federal Communications Commission heard over 3,700 complaints from disgruntled consumers.

Back in November of 2006, Verizon Wireless was one of the first cell phone providers to reduce their fees. Formerly $175, the company agreed that the fee would be lowered by five dollars for every month that a consumer had left on his or her contract. In May, AT&T followed suit. T-Mobile began making similar provisions at the end of June; now, instead of charging $200, the company is requiring a fee of $100 for customers who terminate their contracts six months before it ends; $50 for those who cancel their plans three months early; and either $50 or the normal monthly fee, which ever proves less expensive, for those who cancel a month too soon. Sprint Nextel is the next company set to lower its prices.

Still, this is not enough for some cell phone users, who insist that the fees are still much too expensive. Wireless providers may have to make even more provisions before too long, because in addition to the FCC’s interest in the matter, Verizon Wireless is set to shell out upwards of $21 million for unhappy customers who filed a class action lawsuit against the company. A spokesperson for Verizon said that it is not yet clear how many of the customers will see that money, or how much each will get. Part of the settlement allows the wireless provider to admit to no wrongdoing against their customers.

(July 18, 2008)