California judge rules that cell phone companies can't charge you for ending a cell phone contract early.

http://tech.yahoo.com/blogs/null/99655

"In one of the most significant legal rulings in the tech industry this year, a Superior Court judge in California has ruled that the practice of charging consumers a fee for ending their cell phone contract early is illegal and violates state law.

The preliminary, tentative judgment orders Sprint Nextel to pay customers $18.2 million in reimbursements and, more importantly, orders Sprint to stop trying to collect another $54.7 million from California customers (some 2 million customers total) who have canceled their contracts but refused or failed to pay the termination fee.

While an appeal is inevitable, the ruling could have massive fallout throughout the industry. Without the threat of levying early termination fees, the cellular carriers lose the power that's enabled them to lock customers into contracts for multiple years at a time. And while those contracts can be heinously long, they also let the carriers offer cell phone hardware at reduced (subsidized) prices. AT&T's two-year contract is the only reason the iPhone 3G costs $199. If subsidies vanish, what happens to hardware lock-in? Could an era of expensive, but unlocked, hardware be just around the corner? It's highly probable."


I personally don't see anything illegal about charging people for backing out of a contract. You knew you signed up for 2 years when you got those two free phones, it's not ok to just not pay for it. I don't like this.

Because the contracts are not written without an escape clause. If your phone plan does not work out and you want to terminate, say because the reception is lousy & you try to do this w/in the first thirty days, they want $2k out of the consumer even though they did not provide a service. (I use this example as I know of it first hand and had to threaten to take them to small claims court).

I wouldn't see anything wrong with the cell companies getting the costs of the phones.

Anything above that cost would be BS though.

Another scenario happened to a good friend of mine. He signed up for a cell plan and then relocated because of his career. Cell company wouldn't back down, and they didn't offer service where he was going, so he had to end his contract eary. Now why should people have to pay for that?

Because he signed the contract?

I agree with this. I don't want to enter into a contract unless I know the phone will work. No contract unless I know people can call it and not have it be long distance. Commercials advertise that you can test out certain services before entering into the contract. If you move they won't change your number usually.

If you want to back out of a contract they should have to provide you with how much that will cost before you enter into the contract. If they don't then that IS a problem. It's also not fair for them to charge you more than the cost of the phones if they have provided no service. It's like loaning someone money and charging them 21% interest per day that it's late. Can't do that, even if they sign and agree to it. At least I thought you couldn't do that, I may be wrong.

I think phones can cost 700-800 dollars, if you get two of them, that brings you to almost 2000.