WASHINGTON, D.C. — Sen. Amy Klobuchar has an ally in her fight against what she calls “outrageous” cell-phone contract early-termination fees — the Federal Communications Commission.
The FCC today sent a letter to Verizon, demanding details about the rate increase, as well as a $1.99 fee the New York Times reported is assessed if a customer accidentally presses a button and logs on to Verizon’s mobile Internet service. Verizon was given until Dec. 17 to respond.
The letter comes one day after Klobuchar introduced legislation that would moderate high service-cancellation fees for users with smart-phones, like the Blackberry or iPhone, who got those phones as part of a package deal with their cell phone service contract. Klobuchar’s bill would limit early-termination fees to no more than the contract discount given when a customer bought the phone. So, if you got a $200 discount at point-of-sale, your early-termination fee couldn’t be more than $200. Those fees would also be prorated along the length of the contract.
“Changing your wireless provider shouldn’t break the bank,” said Klobuchar after introducing the measure. “Forcing consumers to pay outrageous fees bearing little to no relation to the cost of their handset devices is anti-consumer and anti-competitive”
Klobuchar’s bill came in response to an announcement by Verizon Wireless that it would increase smart-phone early-termination fees to $350, up from $175. After prorating, a customer with just one month left on his or her contract would still have to shell out $120 to break the contract early. That, by the way, was another thing the FCC told Verizon they want answers on.