Webb, Senators Introduce Bill to Rein-in Cell Phone Early Termination Fees

Bill requires wireless phone companies to pro-rate early termination fees, provides more transparency on customers’ bills

Washington, DC – Today, Senator Jim Webb (D-VA) joined Senators Amy Klobuchar (D-MN), Russ Feingold (D-WI), and Mark Begich (D-AK) in introducing “The Cell Phone Early Termination Fee, Transparency and Fairness Act.”  This legislation would require wireless phone providers to clearly notify customers of and pro-rate any Early Termination Fees (ETF), not only at the time of purchase, but for the duration of their contract.

“At a time when families are taking steps to reduce expenses, this legislation will provide transparency and fair safeguards for American consumers,” said Senator Webb.

The bill would require wireless carriers to provide “clear and conspicuous disclosure” of the ETF at the time of purchase. It also requires monthly billing statements to include the pro-rated fee the customer would be charged if they were to terminate the contract before the end of the next billing cycle. At a minimum, the ETF for a two-year contract would be reduced by half after one year. 

In November, Verizon Wireless, the nation’s largest cell phone service provider, increased their Early Termination Fees from $175 up to $350 for customers purchasing an Advanced Device with a one or two year service agreement if they disconnect service prior to the minimum term. The $350 ETF will decrease $10 for each month of service completed.