Released: July 30, 2008

Sprint must reimburse some early termination fees

Source: Cecelia Kang, Washington Post (Free Registration)

Sprint Nextel was wrong to charge customers penalty fees of $73 million for early termination of cellphone contracts, a California court ruled yesterday, offering encouragement to customers of other companies who have filed similar suits around the nation.

Sprint must pay $18.3 million in cash to users who paid early-termination fees; another $54.8 million must be credited to users who were charged but didn’t pay the fees, Alameda County Superior Court Judge Bonnie Sabraw said in her decision, which is open to comment until Aug. 5, when the final ruling will be made.

The penalties are not legal under California law, the judge said. They are not rates, as argued by the carriers, which allows consumers to sue in state courts.

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