Verizon Opens Wallet to Settle Raft of Early Termination Lawsuits

http://www.ecommercetimes.com/story/...ome=1215820321

By Walaika Haskins
CRM Buyer
Part of the ECT News Network
07/11/08 12:23 PM PT

Verizon has settled multiple lawsuits directed at the company with a $21
million payout. The lawsuits focused on Verizon's early termination fees
for wireless users. Other carriers are facing similar lawsuits, and some
have changed their policies.


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Verizon Wireless has agreed to a US$21 million payout to settle lawsuits
alleging that the wireless carriers' early termination fees (ETFs) were too
high and unfair to consumers.

While Verizon has not admitted any wrongdoing in the case, the
multi-million dollar settlement covers not only a California-based class
action lawsuit but a variety of cases pending across the country as well.

The decision comes against the backdrop of the recent Federal
Communications Commission (FCC) hearings held in June, as the government
agency and Congress examine the fees customers must pay when they cancel a
wireless phone contract before it expires. The costs can range from $150 to
more than $200. The decision also comes as Sprint (NYSE: S) awaits a
verdict in a similar case in California.

"Ours covers all the similar lawsuits nationally, not just in California.
We wanted to put this behind us. Sprint is defending their current ETF
practices, while we changed our ETF policy two years ago. So this is
irrelevant to today and doesn't have anything to do with the way we handle
ETFs today," Jim Gerace, a Verizon Wireless spokesperson, told CRM Buyer.


Depends on How You Look At It
One's stance on ETFs depends on one's worldview, according to Bill Hughes,
an In-Stat analyst.

One viewpoint is that "ETFs are just another tool used by evil companies
that are looking to exploit the naiveté of consumers caught up in a system
that they cannot hope to understand. It is the proper role of the
government to protect these simple rubes," he explained.

Another viewpoint, he said, sees consumers as logical decision-makers that,
while influenced by merchandising techniques such as those provided by
wireless operators, are perfectly capable of entering into contracts, and
only sub-optimal results can come from governmental interference in
abrogating valid commercial contracts for political reasons.

In reality, however, most people seem to fall somewhere in between the two,
though the first worldview makes for good press, he told CRM Buyer.

"It is currently an issue relating to the sub-prime mortgage situation in
addition to ETFs," Hughes pointed out.

While Hughes acknowledged trending more toward the latter view, FCC
Chairman Kevin Martin -- who has affirmed his belief in the fees -- seems
to fall more toward the middle. During the hearings in June, the FCC head
voiced his concern that ETFs are not being used by wireless operators to
offset costs, "but as a means of locking consumers into a service
provider."

The wireless operators contend, however, that the fees help make up for the
subsidies the companies offer customers when they purchase a mobile handset
with a standard two-year contract. For example, AT&T (NYSE: T) charges new
subscribers with a two-year contract as little as $199 for the new 3G
iPhone. Meanwhile, subscribers who refuse to be tied to AT&T for 24 months
can purchase the same handset for $599.

"The way some [state] government[s] have addressed the merchandising
technique of subsidies is to ban them altogether as being anti-competitive.
California was one of the governments that had this position. In the early
1990s, wireless operators did not offer subsidies in California," Hughes
explained.

Most carriers, including Verizon, have altered their ETF policies and
implemented the practice of prorating the fees based on the length of time
remaining on the contract.

"All in all, $21 million to get out of a lawsuit is not that much of a
ticket to pay. Perhaps the answer is that all wireless operators will stop
having subsidies in California. Still another possibility is that the
outcome of the FCC ruling on ETFs could make the California laws moot,"
Hughes concluded, though he said the latter outcome was doubtful.

On 11 Jul 2008 23:56:48 -0000
ken@nowhere.com (Ken) wrote:

> http://www.ecommercetimes.com/story/...ome=1215820321
>
> By Walaika Haskins
> CRM Buyer
> Part of the ECT News Network
> 07/11/08 12:23 PM PT
>
> Verizon has settled multiple lawsuits directed at the company with a
> $21 million payout. The lawsuits focused on Verizon's early
> termination fees for wireless users. Other carriers are facing
> similar lawsuits, and some have changed their policies.
>

(snip)

> Most carriers, including Verizon, have altered their ETF policies and
> implemented the practice of prorating the fees based on the length of
> time remaining on the contract.
>

(snip)

If verizon is doing that, it must be a recent development. A couple
years ago, we cancelled a Verizon 2-year contract at 2 years PLUS ONE
DAY, and Verizon wanted to charge us $175 X 2 for an ETF. Bastards.
They've lost us for life for that shit. And no, we didn't pay it. The
fact that they would TRY to charge us an enormous ETF beyond the end of
our contract is what pissed us off. Severely. -Dave

Dave <noway@nohow.not> wrote in
news:20080712122724.5600fab4.noway@nohow.not:

> Verizon ............................. Bastards.

Very observant....no argument here....(c;

In message <20080712122724.5600fab4.noway@nohow.not>, Dave
<noway@nohow.not> wrote:

>> Most carriers, including Verizon, have altered their ETF policies and
>> implemented the practice of prorating the fees based on the length of
>> time remaining on the contract.
>
>If verizon is doing that, it must be a recent development.

Indeed - and about goddanm time, too.

Not only do those rapacious ****ers renew your "contract" but they
charged you the full ETF even if you cancel ONE DAY early.

>A couple
>years ago, we cancelled a Verizon 2-year contract at 2 years PLUS ONE
>DAY, and Verizon wanted to charge us $175 X 2 for an ETF. Bastards.
>They've lost us for life for that shit.

Same here. In my case, although the "2-year contract" period was over
by several months, Verizno claimed I had "extended" my contract by
another year by changing my calling plan (we moved from AZ to CA and
my wife wanted a local phone number). We did NOT buy any new
(subsidized) hardware, nor did our rate plan change, so what "costs"
does Verizon need to recover from us that would justify extending our
contract? Of course, the droid at the Verizon store never mentioned
it, and I don't recall signing any sort of agreement to extend my
contract period by an additional year.

How can it be a real contract if a) you didn't sign the updated
agreement, and b) there was no "meeting of the minds" when they
"extended" the term of your commitment because you made some innocuous
change to your account? Of course, even if this "contract" doesn't
hold up in court, it would cost you a lot more than $175 to litigate
it - which is precisely what Verizon is counting on.

**** Verizon - I will never do business with them again EVER.

"Scott in SoCal" <scottenaztlan@yahoo.com> wrote in message
news:g6qh74p0t2ihne6fauaumvc0jgnkutdj6a@4ax.com...
> In message <20080712122724.5600fab4.noway@nohow.not>, Dave
> <noway@nohow.not> wrote:
>
>>> Most carriers, including Verizon, have altered their ETF policies and
>>> implemented the practice of prorating the fees based on the length of
>>> time remaining on the contract.
>>
>>If verizon is doing that, it must be a recent development.
>
> Indeed - and about goddanm time, too.
>
> Not only do those rapacious ****ers renew your "contract" but they
> charged you the full ETF even if you cancel ONE DAY early.
>
>>A couple
>>years ago, we cancelled a Verizon 2-year contract at 2 years PLUS ONE
>>DAY, and Verizon wanted to charge us $175 X 2 for an ETF. Bastards.
>>They've lost us for life for that shit.
>
> Same here. In my case, although the "2-year contract" period was over
> by several months, Verizno claimed I had "extended" my contract by
> another year by changing my calling plan (we moved from AZ to CA and
> my wife wanted a local phone number). We did NOT buy any new
> (subsidized) hardware, nor did our rate plan change, so what "costs"
> does Verizon need to recover from us that would justify extending our
> contract? Of course, the droid at the Verizon store never mentioned
> it, and I don't recall signing any sort of agreement to extend my
> contract period by an additional year.
>
> How can it be a real contract if a) you didn't sign the updated
> agreement, and b) there was no "meeting of the minds" when they
> "extended" the term of your commitment because you made some innocuous
> change to your account? Of course, even if this "contract" doesn't
> hold up in court, it would cost you a lot more than $175 to litigate
> it - which is precisely what Verizon is counting on.
>
> **** Verizon - I will never do business with them again EVER.

Last September I increased my family share plan minutes from 700 to 1400,
and in doing this , they reset my contract two years on all five phones of
my plan. Most folks believe that I can fight this, but in the area that I
live, Verizon simply has the best coverage. Aside from their lousy attitude,
they work well for me.

This thread points out something that many don't seem to understand.
When you are buying a service, any type service, and you ask that the
service be changed, that's a change in the contract. In many cases,
besides cell phone service, & in all cases when it's cell phone
service, you need to read the papers you are signing for the changes
and know everything you have signed. If doing the change on line, your
best bet is to record the conversation & ask specificately if it
changes your contract dates.

I have a cell phone contract that was signed for 1 year. That was 7
years ago. When I view my account on line, it says my contract
expiration date is Janurary 14, 2002. I haven't change anything &
will not, because I can't get the same rates on current plans from
anyone.

Tom J

On 2008-07-12, Scott in SoCal <scottenaztlan@yahoo.com> wrote:

> Not only do those rapacious ****ers renew your "contract" but they
> charged you the full ETF even if you cancel ONE DAY early.

I rode it out in 2004 when I had network problems and they refused to do
anything about them. Bought a Sprint phone and started using it, along with
my Sprint-assigned number, about six weeks before end of contract; then I
ported my number *AFTER* my contract was up.

What you're describing IS their stated policy, and you can take it or leave
it (i.e. you don't have to use them). I get irritated at people who sign
or verbally agree to a contract and then get all pissy when the person or
company on the other end holds them to the contract. Yes, Scott, that means
you. :)

But what is this about renewing the contract? They're not supposed to do
that automatically.

In fact, when I moved from Ohio to California, I *needed* to set up a new
account because different regions of the US are, or at least were, handled
by different operating divisions of VZW. I called the E-Z Move department,
and they took care of me. The ETF on the Ohio account was credited back to
me (it gets billed automatically). The activation fee on the Cali account was
also credited (it also gets billed automatically). And I kept the same end
date.

VZW does suck, but it sounds like something got badly screwed up in this
case.


--
Steve Sobol, Victorville, CA PGP:0xE3AE35ED www.SteveSobol.com
Geek-for-hire. Details: http://www.linkedin.com/in/stevesobol

>This thread points out something that many don't seem to understand.
>When you are buying a service, any type service, and you ask that the
>service be changed, that's a change in the contract. In many cases,

A change in the contract, in and of itself, does not necessarily
restart it. And there are some changes I sincerely hope DON'T
restart the contract, like changing your billing address or
credit card number, calling to ask your balance, making a phone call
(even if it's a premium call that will be billed extra).

>besides cell phone service, & in all cases when it's cell phone
>service, you need to read the papers you are signing for the changes
>and know everything you have signed.

Often, that's a standard credit card slip. And nothing else.
And if you ask for a copy of the contract you get blank stares
over the phone.

>If doing the change on line, your
>best bet is to record the conversation & ask specificately if it
>changes your contract dates.

Chances are they will not know what you are talking about, so they
will guess.

For some cell phone companies, who try to charge ETF if you are
early or late in cancelling, and only allow a narrow window (e.g.
one hour (lunch hour)) to call, the best bet may be to get a third
party that THEY involve who will know of your request. Although I
can't recommend this, police bomb disposal units or SWAT teams WILL
remember your disconnection request if they get called because of
it.

>I have a cell phone contract that was signed for 1 year. That was 7
>years ago. When I view my account on line, it says my contract
>expiration date is Janurary 14, 2002. I haven't change anything &
>will not, because I can't get the same rates on current plans from
>anyone.

Most cell phone companies don't allow that. You MUST renew your
contract after it expires or you won't get any service. There's
no going "month-to-month" like in renting apartments.

In message <slrng7icbe.sqs.sjsobol@amethyst.justthe.net>, Steve Sobol
<sjsobol@JustThe.net> wrote:

>On 2008-07-12, Scott in SoCal <scottenaztlan@yahoo.com> wrote:
>
>> Not only do those rapacious ****ers renew your "contract" but they
>> charged you the full ETF even if you cancel ONE DAY early.
>
>What you're describing IS their stated policy

If extending your contract without your express agreement is their
stated policy, they certainly didn't state it very loudly when I first
signed on with them.

>I get irritated at people who sign
>or verbally agree to a contract and then get all pissy when the person or
>company on the other end holds them to the contract. Yes, Scott, that means
>you. :)

Be irritated all you like. Verizon still blows dead bears and I'm
going to tell everyone who will listen about my experience.

>But what is this about renewing the contract? They're not supposed to do
>that automatically.

Do I have your permission to be irritated about that? :)

>VZW does suck, but it sounds like something got badly screwed up in this
>case.

It seems we agree more than we disagree.

Gordon Burditt wrote:
>> This thread points out something that many don't seem to
>> understand.
>> When you are buying a service, any type service, and you ask that
>> the
>> service be changed, that's a change in the contract. In many cases,
>
>
>> I have a cell phone contract that was signed for 1 year. That was 7
>> years ago. When I view my account on line, it says my contract
>> expiration date is Janurary 14, 2002. I haven't change anything &
>> will not, because I can't get the same rates on current plans from
>> anyone.
>
> Most cell phone companies don't allow that. You MUST renew your
> contract after it expires or you won't get any service. There's
> no going "month-to-month" like in renting apartments.

The difference is, I know what my contract terms are!! The plan I
bought and still have is a Verizon Single Rate North America Plan. The
reason it's still honored is the clause in the contract that states
"Under this contract you will have 2000 free weekend minutes for life,
from 7:00 PM Friday to 7:00 AM Monday". That statement alone keeps
the contract in force as long as I don't change my plan. I also have
never had a roaming charge anywhere in North America because of the
single rate.

Like I said, read your contract and know what it says. I like
Verizon's service & terms!!

Tom J