ATandT Offers $18 Million to Settle Early Termination Fee Complaints

AT&T has filed a class action settlement in a New Jersey U.S. District Court regarding customer complaints about the company’s flat-rate early termination fees (ETFs). Although the document is dated Sept. 15. 2009, those involved in the lawsuit were notified Jan. 26.

The carrier has offered $16 million in cash, plus $2 million in “non-cash benefits” as a settlement to those who submit a claim by June 14.

“The Settlement Class includes all current or former customers of AT&T Mobility or its predecessor in the U.S. who paid or were charged a flat-rate ETF at some time during the period January 1, 1998 through November 4, 2009; and/or who have or had a contract for service with AT&T Mobility that included a flat-rate ETF…” a document posted to a site not run by AT&T states
The move follows government criticism of Verizon Wireless’ ETF, which the carrier announced on Nov. 5 would double, to $350, for certain subscribers who cancel their contracts early.

“Changing your wireless provider shouldn’t break the bank,” said Minnesota Senator Amy Klobuchar in a Dec. 3 statement. “Forcing consumers to pay outrageous fees bearing little to no relation to the cost of their handset devices is anti-consumer and anti-competitive.”

That day, Klobuchar, with three other senators, introduced a new piece of legislation, the Cell Phone Early Termination Fee, Transparency and Fairness Act, which would prevent carriers from charging ETFs higher than the discount that the carriers offer to consumers for entering into multiyear contracts.

The FCC legislation would additionally prorate ETFs, enabling customers who remained in their contracts longer to pay less. In this vein, the AT&T settlement offers repayment reflective of the amount of time left on a contract when an ETF was applied.
“The Court has not decided whether the claims in the lawsuit have any merit. However, if you are a member of the Settlement Class, you have a choice to make now,” states the settlement document.