Senator Proposes Limits On Early Termination Fees

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A handful of senators introduced a bill today that aims to set limits on the early termination fees when consumers want to leave their contract early, reports thehill.com.

The bill, which was proposed by Sen. Amy Klobuchar (D-Minn.), will be tricky. If it limits how much carriers can charge, then it may limit how much carriers can subsidize handsets, which means consumers may have to pay more for phones. In a statement, CTIA-The Wireless Association President and CEO Steve Largent, said: “This type of prescriptive mandate runs the very real risk of limiting consumer options in the future.”

It’s a little unclear how the bill would be worded, but in addition to scrutinizing termination fees, it will also require wireless providers to pro-rate the fees and clearly notify customers about the fees — not only at the time of purchase but for the duration of the contract. Today, most carriers do pro-rate the fees. Klobuchar, along with other sentators, including Russ Feingold (D-Wis.), Jim Webb (D-Va.) and Mark Begich (D-Alaska.), are the ones backing the bill. They are calling the fees “budget-busters” and that say the fees, which range between $150 and $350, are not fair to consumers.

The bill is in direct response to Verizon Wireless’ recent announcement that it would start doubling its fee for smartphone users. Last month, the carrier said it will increase its ETF

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