FCC considers proposal to change early termination fees

By Justin Mann on
Have you ever signed up for a new service then found out a few months later it completely sucks? In the modern world where most of us have a plethora of choices to choose from, such as with cell service carriers and ISPs, it's usually just a matter of terminating your old contract and picking up a new one with a new company. If you have done that, however, you've also likely run into early termination fees. These companies want so badly to prevent you from leaving that just about all of them have steep penalties for anyone leaving a contract early, with most early termination fees ranging from $100 to $200.

The FCC sees that as excessive, and is now considering a bid to limit these fees. The FCC seems to be considering an overhaul with the system, giving consumers the right to cancel with no penalty in the first month of service, reducing the maximum size of the termination fees and allowing the fees to “taper off” the longer service has been established. The proposal itself was actually sponsored by Verizon – one of the largest cell companies in the U.S. Why? While hiding behind a proposal that seems to be consumer-friendly, in actuality they are seeking immunity from lawsuits related to just such fees. Class-action lawsuits in multiple states have been filed at multiple times against these companies for these fees.

The cell companies claim such fees are necessary to recoup losses from cell phone sales and the cost of setting up and supporting new customers. The customers, on the other hand, believe it's just a way of strong arming you into sticking with their service, whether or not you are unhappy with it.

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