September 17, 2007 / 7:03 PM / 12 years ago

U.S. curbs sought on fees to quit wireless contracts

WASHINGTON (Reuters) - Some U.S. consumer advocates on Monday threw their support behind legislation that would limit fees that wireless, telephone and cable companies can charge dissatisfied customers who want to end service before their contract expires.

Consumer Federation of America and Consumers Union endorsed a bill introduced recently that would bar wireless carriers from charging fees to customers who drop service within 30 days, and require them to pro-rate early termination fees for those who exit their contract after 30 days.

“Contract extensions and early termination fees are the #1 consumer annoyance with the wireless industry,” Chris Murray, a lawyer for Consumers Union, said in a statement. “Consumers are powerless to negotiate better terms with their cell phone carrier, but this bill would help to level the playing field.”

Verizon Wireless, owned by Verizon Communications and Vodafone Group Plc, is the only major wireless carrier that currently pro-rates early termination fees.

The Senate bill was introduced on September 7 by Democrats John Rockefeller of West Virginia and Amy Klobuchar of Minnesota.

It has been criticized by the wireless industry’s main trade group, CTIA, as an unnecessary interference in a competitive industry. Consumers can avoid the fees by signing up for prepaid wireless phone plans, the industry argues.

In addition to restricting termination fees, the legislation also would require wireless carriers to more clearly disclose details about charges on customers’ bills.

Last week, the chairman of the U.S. Federal Communications Commission said the agency should look into possible restrictions on early termination fees charged by wireless carriers and other service providers.

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