Lawsuit Involving Early Termination Fees Will Proceed

Santa Monica, CAEarly termination fees on cell phone contracts are understandable in some situations, but when cell phone carriers charge the fee even when they are the cause of problems, consumers should fight back. Some consumers have started fighting back against companies such as Cingular (now AT&T) for what they say is false and misleading advertising. More and more lawsuits are being filed against cell phone companies that charge unfair early termination fees as people become fed up with ridiculous industry practices.

Recently, the courts decided that a lawsuit against Cingular could proceed. The suit claimed that Cingular offered rebates to people who purchased cell phones and advertised a cell phone rate that reflected the rebate as a discount. However, rather than sending out rebate checks, the company issued "VISA Reward cards" that could only be used in limited circumstances.

Unfortunately for Cingular customers, by the time they realized they would not receive their rebate check they could not cancel their contract without paying a $175 early termination fee. According to the lawsuit, consumers waited up to 12 weeks to receive the rebate payment, which was the first time they were made aware of the limitations of the VISA Reward Cards. "Because consumers will be well into their contract term, and will not be able to cancel service without incurring substantial early termination fees, they have, for all practical intents and purposes, no ability to undo the transaction," court documents state.

The lawsuit seeks a court order for the company to stop the practice and to give customers refunds. It was filed on behalf of all California residents who made purchases from Cingular in the four years prior to the lawsuit being filed and received a VISA Reward Card instead of an actual rebate. Cingular had tried to have the lawsuit dismissed, but judges found the suit had merit and allowed it to continue.