Sprint-Nextel Sued in Class Action Lawsuit Over Early Termination Fees
Sprint-Nextel Corp. is facing a federal class-action lawsuit which was filed against them by subscribers. In the lawsuit, the plaintiffs are seeking reimbursement for early termination fees (ETFs). This lawsuit comes on the heels of another ETF lawsuit case that was held in July. The judge for that lawsuit determined that Sprint-Nextel had indiscriminately charged fees in an attempt to prevent dissatisfied customers from dropping their services, which was a violation of California state law. The judge ordered Sprint-Nextel to pay $73 million in compensation to approximately 1.9 million customers.
Now, the plaintiffs of this class-action lawsuit hope to find Sprint-Nextel, the third largest provider of wireless services, in violation of federal law as well as statutory law for all 50 states. The new lawsuit claims that Sprint-Nextel has been charging inappropriate fees of between $150 and $200 since 1999 and that these fees are in violation of the Federal Communications Act in every state, not just California. The lawsuit seeks $1.2 billion in reimbursement.
Attorney Scott Bursor, who is now promoting the federal class-action suit after working on the California suit, says he intends to prove the fees violate federal law. Bursor was also involved in a class-action suit in July against Verizon Wireless in which they were ordered to pay $21 million in reimbursement for ETFs.
Matthew Sullivan, a spokesman for Sprint-Nextel, said that the federal class-action suit is “cynical and opportunistic.” The jury in the original case ruled in the favor of Sprint-Nextel, however, the judge’s ruling was against the company. Therefore, the ruling in the California case is preliminary and not final. Judge Bonnie Sabraw of the Alameda County, California Superior Court will finalize the decision within 90 days of the hearing.
In October, Sprint-Nextel issued a revised ETF policy. The $200 fee will be decreased by $10 each month starting in the seventh month of the customer’s contract. By the 15th month of the contract, the ETF will be $100, which is the lowest pro-rated fee in the cell phone industry. The new ETF policy applies to both new and existing customers.