Boise, IDT-Mobile USA, one of the largest cell phone companies in the United States, is facing a lawsuit over the company's
early contract-termination fees.
The lawsuit, which was filed in Idaho on November 10, argues that the company's early termination fees violate consumer protection laws in 13 states. T-Mobile currently charges a $200 flat fee for early cancellation.
The $200 fee is always charged, regardless of whether a customer cancels at the beginning or near the end of a contract, and even if the contract is cancelled because of poor service.
Lawyers for the plaintiffs argue that consumer protection laws require T-Mobile to figure out the damage incurred by a broken contract on a case-by-case basis rather than charging one standard fee for everyone. For example, a person who cancels later in his contract should be charged a smaller fee than someone who cancels during the early stages of the contract. Furthermore, lawyers contend that the cancellation fee is illegal when contracts are cancelled due to unsatisfactory service.
The lawsuit also alleges that the termination fees are used to discourage subscribers from considering switching cell phone carriers.
Lawyers are seeking class-action status for the lawsuit, which would enable it to cover customers in 13 states, meaning that hundreds of thousands of people could be included in the lawsuit.
If the courts find the termination fee illegal, repercussions could potentially be felt by all the other cell phone companies that charge standard early termination fees.
The lawsuit, which currently covers over 100 people and is seeking damages of more than $5 million, was filed on behalf of an Idaho law firm that tried to cancel its T-Mobile service after discovering its attorneys could not get any service in parts of Idaho where they did business.
The thirteen states that could potentially be represented if the lawsuit is certified as a class action are Idaho, Washington, Arizona, California, Florida, Illinois, Massachusetts, Michigan, Missouri, New York, New Jersey, North Carolina, and Tennessee.
If you live in one of those states and have paid a cancellation fee to T-Mobile, you may be eligible to join the class action suit. Contact a lawyer to discuss your options.