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So apparently consumers can win in arbitration hearings. A potential $1 billion class action suit is set to move forward, thanks to a ruling by Eugene Farber, a senior arbitrator-mediator for the American Arbitration Association. The class, which at 70 million is the largest ever certified in arbitration, is disputing early termination fees they were assessed by the company. These fees are being deemed “illegal” by plaintiffs’ council, Scott Bursor. This I’m having trouble wrapping my head around.

No one likes ETFs. Why would they? If you want out of your cell service, you want out of your cell service. Problem is, you signed a contract, and in order to escape from that contract you need to pay a buy-out.

Now, over the years this has been a firm $175 buyout. However, in late 2006, Verizon changed its policy to prorate the fee, dropping it $5 a month until your contract is up. It’s at least a step in the right direction. If the class is suing for reparations — i.e., trying to get back the prorated amount — then yeah, I think this case has legs.

However, if they want all $175 back because they don’t feel they should have been charged any ETF, well, then I have one suggestion: Don’t sign a contract! Yeah, you wanted that fancy new phone, and you could only afford it with a contract. Fine. But you still signed it, knowing it was a two-year deal. And the carrier, in exchange for your pledge of loyalty, knocked $150 or so off your phone.

I’ve always though that was kind of an even exchange. Yeah, no on wants to be tied down for two years, but no one wants to pay $400 for a phone, either. So you compromise. But once you take that subsidy and sign that contract, you shouldn’t scoff when you try to terminate early and are told you must pay first. No, you shouldn’t be paying $175 when you have three months left on your contract. But as I said, if the class is seeking a prorated refund, then yeah, I’m on board

But if they’re saying that ETFs in general are illegal, well, I can tell you what happens if they win. Because at that point, there’s no incentive to keep your contract. You can come and go as you please, and everything becomes prepaid. Which translates to everything becoming more expensive.

(Prepaid certainly can be cheaper, but heavy talkers are usually better going with a contract rate plan.)

So, seeking proration of previously assessed ETFs, yes. Seeking full $175 refunds, hell no.

[RCR Wireless News]

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