Minn. consumers to receive restitution from falsely extended cell phone contracts
Lori Swanson (D)
ST. PAUL, Minn. (Legal Newsline) - Following a consent judgment between Attorney General Lori Swanson and Sprint Nextel, customers who believe that their cell phone contracts were extended without their permission or the length of their contract or applicable penalties for early termination were not disclosed may file a claim for monetary relief.
"Sprint Nextel customers whose contracts were secretly extended when they made small changes to their plans or who were charged hidden early termination penalties now have a way to request their money back or for the penalties to be waived," Swanson said.
Between July 1999 and December 2008, Sprint Nextel requested that at least 439,000 Minnesota residents pay early termination penalties. An additional 450,000 customers are currently under contracts with Sprint Nextel that contain early termination penalties. The current customers would be eligible to file claims if their contracts were extended without permission or full disclosure.
Customers who have become Sprint Nextel users since September 26, 2001, are eligible to submit a claim to the attorney general's office if they believe that they were enrolled in a contract or extended contract without their authorization or knowledge or if Sprint Nextel did not adequately disclose the length of the wireless contract or contract extension of the early termination fees that applied.
Consumers may receive relief in the form of a refund of the early termination fees and any related taxes and fees paid as a result of terminating the contract. Consumers may also receive a reversal of any early termination fees and any related taxes and fees that the consumers was charged but did not pay, including the reversal of any adverse reporting to any credit reporting agency. Additional relief may come in the form of a release of the consumer from the terms of their current wireless contract without penalty.
The consent judgment with Sprint Nextel requires the company to liberally construe all facts and circumstances supporting all claims in favor of the consumer. Any disputed claims that Sprint Nextel does not pay will be reviewed by a third party, whose decision is binding on Sprint Nextel. In the case of a review, all facts and circumstances must be liberally construed by Sprint Nextel in favor of the consumer.
Sprint Nextel is also banned from extending consumers' wireless contracts without their consent by the consent judgment, which also requires the company to make clear and conspicuous disclosures about contract lengths and applicable early termination penalties. Sprint Nextel will also document the consumer's consent to the new contract.
The consent judgment follows a September 2007 lawsuit filed against Sprint Nextel by Swanson. That lawsuit alleged that the company would often, without permission, extend consumers' existing contracts for as much as two years when small changes were made to a consumers' wireless phone service. The lawsuit also alleged that Sprint Nextel charged penalties of as much as $200 per line if a consumer canceled an extended contract.