Sprint Nextel Proposes Settlement of ETF Lawsuit

US operator, Sprint Nextel has proposed a settlement of lawsuits relating to its Early Termination Fees (ETF) that were applied to customers who terminated their contracts before they had expired. Under the terms of the proposed settlement, Sprint Nextel has agreed to pay US$14 million into a Common Fund. Sprint Nextel will also provide up to US$3.5 million in Non-Cash Benefits.

Sprint Nextel denies the allegations in the lawsuit.

Last year, the company lost a US$73 million lawsuit over the early termination fees, but the a lawsuit was seeking to upgrade that to a class-action and hence act on behalf of all the company's customers. There had been some talk that the lawsuit would seek a refund of the US$150-$200 fees between 1999-2008 - which could have amounted to around US$1.2 billion.

Sprint Nextel has also agreed to not insert a flat-rate ETF provision into its customer service agreements for personal wireless service in the U.S. until January 1, 2011, but may charge a pro-rated ETF during this time period.

Rival operator, Verizon Wireless also settled a class-action lawsuit over early termination fees for $21 million in July 2008.

On the web: Sprint ETF Settlement

Posted to the site on 12th August 2009