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Skype Settles Credit Expiration Class Action

Agreement brings end to company's policy

Skype, the popular website that lets consumers make online phone calls, has agreed to settle a class action that took issue with the company's policy of expiring credits that were older than 180 days.

While Skype is free for consumers who call each other over the internet, there is a fee to connect to a landline or cell phone, to use features like voicemail and text messaging, or to personalize accounts or buy a phone number than can be reached by other callers. For these services, users can purchase a certain amount of Skype "credit," which they can use until it is depleted.

There's one caveat: if a user's account remains inactive for more than 180 days, the credit is wiped out entirely. Thus, if a user buys $100 of Skype credit, uses $5 worth, and then doesn't use her account for roughly six months, her account balance returns to zero, even though $95 of her purchase was never used.

That's where the lawsuit comes in. Plaintiffs Holly Barker and Brian Carness contend that the Skype credit is, for all intents and purposes, a gift card, and that placing an expiration date on its value or subjecting it to inactivity fees violates the laws of several states, including Washington, where the suit was filed.

Under the settlement, Skype will pay $1.8 million toward a settlement fund, which will in turn provide eligible class members with electronic vouchers for Skype credit of up to $4 each. Despite agreeing to settle the case, Skype denies any wrongdoing.

Perhaps more significantly, Skype has agreed, as part of the settlement, to do away with its 180-day policy. In the future, accounts that remain untouched for 180 days or more will be deemed "inactive" and users will have to reactivate them. Any remaining credit, however, will be untouched and available for immediate use.

Daniel Johnson, attorney for the plaintiffs, is pleased with the settlement, especially the injunctive relief. "The main thing we got through the settlement is the change -- they stopped doing it," Johnson said last month, when the settlement was beginning to fall into place.

The settlement still requires final court approval. A fairness hearing is set for March 12. Class members who wish to object to or opt out of the settlement must do so by February 16. All claim forms must be submitted by March 1.

Further information regarding the settlement is available at https://creditexpirationclassaction.com.

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