By Mark Huffman
ConsumerAffairs.com
Novermber 17, 2009
The length of cell phone contracts and early termination fees lie at the crux of a recent standoff between the State of Minnesota and Sprint Nextel. In this case, the telecom provider is the one that blinked.
Minnesota Attorney General Lori Swanson says consumers who believe that Sprint Nextel extended their cell phone contracts without their permission or did not disclose either the length of the contract or the applicable penalties for early termination may file a claim for monetary relief under a consent judgment she worked out with the company.
Sprint Nextel requested that at least 439,000 Minnesota residents pay early termination penalties between July 1999 and December 2008. An additional 450,000 customers are currently under contracts with Sprint Nextel which contain early termination penalties, and those customers would be eligible to file claims if their contracts were extended without permission or full disclosure.
Swanson filed a lawsuit against Sprint Nextel in September, 2007 alleging that the company often extended consumers' existing contracts for up to two years without their permission when they made small changes to their wireless phone service, such as adding or decreasing minutes or adding or dropping a family member.
The lawsuit alleged that Sprint Nextel charged penalties of up to $200 per line if the consumer cancelled the extended contracts. A review of ConsumerAffairs.com's complaint database shows widespread complaints about contract extensions and early termination fees by all wireless providers, including Sprint Nextel.
'Secret extensions'
"Sprint Nextel customers whose contracts were secretly extended when they made small changes to their plans or who were charged hidden early termination penalties now have a way to request their money back or for the penalties to be waived," Swanson said.
Minnesotans who became customers of Sprint Nextel after September 26, 2001 may submit a claim to the Attorney Generals Office if they believe that:
• Sprint Nextel enrolled them in a contract or extended their contract without their authorization or knowledge; or
• Sprint Nextel did not adequately disclose the length of the wireless contract or contract extension or the early termination fees that applied.
Applicable relief may include, among other things:
• A refund of the early termination fees and any related taxes and fees the consumer paid as a result of terminating the contract.
• A reversal of any early termination fees and any related taxes and fees that the consumer was charged but did not pay, including the reversal of any adverse reporting to any credit reporting agency.
• A release of the consumer from the terms of their current wireless contract without penalty.
The consent judgment bans Sprint Nextel from extending consumers' wireless contracts without their consent and requires the company to make clear and conspicuous disclosures about contract lengths and applicable early termination penalties and to document the consumers consent to the new contract.
