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Klobuchar: FCC survey supports plan to rein in cell phone termination penalties

Sen. Amy Klobuchar (D-Minn.) said the Federal Communications Commission's survey on consumer cell phone experiences supports her bill that would force wireless companies to do a better job at explaining and notifying subscribers of penalties for leaving their contracts early.

The FCC said Wednesday that half of all cell phone users were confused or unaware of the early termination fees attached to their wireless service contracts. One of six users also said they had incurred surprising charges to their monthly fees.

Last December, Klobuchar, Sen. Russ Feingold (D-Wi.), Jim Webb (D-Va.) and Mark Begich (D-Ak.), introduced a bill that would require wireless providers to pro-rate early termination fees (ETFs) and clearly notify customers about the fee, not only at the time of purchase, but for the duration of their contracts.

The bill was introduced when Verizon Wireless increased the ETFs for certain smart phones to $350. AT&T recently increased its cancellation penalties for new and repeat smart phone customers, starting June 1, to $325 from $150.

“The FCC’s consumer survey confirms what we have known for a long time – that confusing Early Termination Fees undermine competition and result in less consumer choice,” said Klobuchar. “Nearly two out of three Americans have seriously considered switching cell phone providers but ultimately decided to stay with their current provider because of a cancellation fee. Like a rigged carnival game, wireless providers bury these fees in the fine print and slam consumers if they try to find better service or save a few bucks in their monthly bill.”

By Cecilia Kang  |  May 27, 2010; 12:36 PM ET
Categories:  Early Termination Fees  
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Next: FCC begins regulatory overhaul of broadband at June 17 meeting


Check out NARUC's statement on the FCC survey:

Posted by: rodeorob | May 27, 2010 3:54 PM | Report abuse

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