Yesterday, Congresswoman Carol Shea-Porter introduced legislation that will help protect cell phone consumers from unreasonable penalties when they end their contracts early. The Cell Phone Early Termination Fee, Transparency and Fairness Act would set limits on Early Termination Fees (ETFs). Late last year, Verizon Wireless announced that they would double their ETF fees from $175 to $350 for certain subscribers who end their contracts early.
"Consumers should not be held hostage by outrageous fees if they want to switch cell phone companies," said Congresswoman Shea-Porter. "This legislation will help protect consumers by pro-rating the cancellation fees that providers charge."
The Cell Phone Early Termination Fee, Transparency and Fairness Act would:
* require wireless carriers to provide "clear and conspicuous disclosure" of the ETF at the time of purchase,
* require carriers to provide monthly billing statements that clearly state the pro-rated fee customers would be charged if they terminate their contracts before the end of the next billing cycle,
* prevent wireless carriers from charging an ETF that is higher than the discount on the cell phone that the wireless company offers consumers for entering into a multi-year contract, and
* ensure that wireless carriers pro-rate their ETFs for consumers who leave their contracts early so that the ETF for a two-year contract would be reduced by half after one year and pro-rated down to zero by the end of a contract term.