Sprint Facing $1.2 Billion Class-Action Lawsuit Over Illegal ETFs

By Dee Chisamera
15:26, November 5th 2008
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Sprint Facing $1.2 Billion Class-Action Lawsuit Over Illegal ETFs

Bad weather heading Sprint’s way these days, as the company faces yet another class-action lawsuit over its early termination fee practices. Sprint is accused of illegally charging its subscribers $1.2 in ETF starting from 1999.

According to a court ruling in July this year, Sprint already needs to refund $73 million to its affected subscribers, although the decision is not final yet. This time, the same lawyer as in the previous case, Scott Bursor, said Sprint violated the Federal Communications Act.

“After a full trial on the merits, we proved that Sprint Nextel’s termination fees violated California law,” Bursor said in a release, referring to the previous case, also adding that they’ve managed to prove that the fees were in fact a way of preventing dissatisfied customers from ending their services.

“Now,” said Bursor, “we will prove that the fees violate federal law as well.”

Sprint’s spokesman Matthew Sullivan told WSJ that the ruling in the July case is still preliminary. “If Mr. Bursor is basing the case on the premise that the northern California lawsuit is final, he’s being presumptuous.”

The early termination fees have longtime been a subject of debate for carriers, consumers and consumer advocates. While the phone companies say ETFs are helping them recover the subsidies they pay to phonemakers to keep prices low on the devices, consumer advocates say they are restricting the consumers' rights to change carriers.

The Federal Communications Commission is currently discussing the issue of Early Termination Fees, trying to find a solution to suit both the interests of consumers, and satisfy carriers.



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