Verizon agrees to pay $21 million to settle suit over early termination fee

Verizon has decided to settle a class action suit filed in California over its early termination fee, and the Appeals Court has upheld the refund. As a result of the settlement, 175,000 members of the class will share the $21 million dollars that the carrier has agreed to pay to settle the case. Scott Bursar, the lead attorney for the plaintiffs, probably had to keep a smile from forming on his face when he said, ""Yesterday's ruling by the Court of Appeal confirms that this is a terrific settlement for Verizon Wireless customers, and now more than 175,000 of those customers will get a substantial refund."A spokesman for Verizon said that the settlement ends all litigation against its ETF, but is not related to the carrier's current ETF policies. As we reported, in November, Big Red doubled the ETF on certain "advanced devices like smartphones and netbooks. Carriers have defended charging these fees as a way to protect itself while still being able to offer the latest and greatest phones at subsidized prices that most can afford. Without the fee, if a customer broke his contract, a carrier would be on the hook for the full wholesale price of a phone with no income to offset the cost. Last month, AT&T raised its ETF for smartphones and netbooks to $325 from $175. Most carriers now pro-rate the ETF, charging the customer a fee that varies depending on how much time is left on the contract. The settled case with Verizon dealt with a flat $175 fee that the carrier had charged certain customers back in 1999. Each class member will receive $87.50 after lawyers take their share.

source: WSJ via FierceWireless