When Ryan Hasson wanted to add text messaging to his two-year contract with Sprint, he didn’t expect it to cost him about $100 in termination fees.
“I wanted to change my plan to add text messaging,” said Hasson, a nutritional sciences and physiology senior. “To do that I had to cancel the existing contract I was in. It ended up costing me a good amount.”
The Federal Communications Commission is currently considering a proposal that would allow customers to cancel their plan without fees within 30 days of signing the contract or up to 10 days after they receive the first bill.
Verizon Wireless, the nation’s No. 2 cell phone company, proposed the plan, which would cut cancellation costs while exempting cell phone companies from being sued by their customers. Wireless companies regularly charge customers at least $175 to end service early. The companies said cancellation fees are needed to cope with the cost of cell phones and signing new customers.
“We have been listening to our customers and we have already reduced our fees,” said Verizon Wireless spokesperson David Clevenger. “My guess is (the proposal) would be in line with what we’re already doing.”
The plan would not abolish cancellation fees altogether, nor refund fees for customers who have previously paid them.
On Friday, FCC Chairman Kevin Martin said he supports government regulation of early termination fees despite the effect that might have on current court cases. The proposal would require cell phone companies to decrease those fees over time on each contract.
Lansing resident Lindsey Odle, 28, said she was on a four-and-a-half-year cell phone contract before canceling.
“I moved here from North Carolina,” she said. “They continued the service of my phone, and my mom and I had to pay about $450 to get out of the contract.”
Despite her calls, the wireless provider charged her $200 to end service
But consumer groups, like Consumers Union, say the proposal would strip states of their ability to control the fees.
AARP, co-counsel in litigation challenging the fees, said it has not been part of any negotiations with the wireless industry, has not seen a proposal and is opposed to any deal that would remove state authority over fees.
“It’s just a bad idea to remove state enforcement in areas that have historically been left to states to regulate when there are not adequate federal enforcement and protections in place,” said Jim Dau, AARP’s senior manager of media relations.
Staff writer Nico Rubello contributed to this report.
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