California Consumers Sue Yahoo, SBC For Termination Fees

from the no-need-for-them dept

We’ve had articles before that talk about how just about every service these days is adding random fees to try to squeeze every last unsuspecting penny out of their customers, while keeping their “list” prices looking low. I’ve always wondered how legal that practice is. While many people just assume that those “fees” are legally required, what about the ones that are completely made up? Now, a California consumer rights group is suing Yahoo and SBC over the $200 termination fees they add for anyone who signs up for their internet service and cancels in less than 12 months. While I do agree that a $200 termination fee seems excessive, I don’t see what’s so illegal about it. I’m assuming that these fees were clearly disclosed to the customers, and they signed a contract knowing what they were getting into. However, there apparently is a California law saying that termination fees are prohibited unless the termination causes damages.

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Comments on “California Consumers Sue Yahoo, SBC For Termination Fees”

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Oliver Wendell Jones (profile) says:

Depends on the setup fee

If they were offered free setup (a $200 value!) for agreeing to stay with them for one year, and they cancel, then by all means, they should have to pay the $200 install fee.

It would be nice if it was prorated, so if you cancelled after 11 months you only had to pay 1/12th of $200, but they have to recoup the money they lost by you not sticking with the plan.

The same thing occurs with cell phone companies, they offer you a ‘free’ phone if you commit to X years of service. Those phones aren’t really free and the companies get their money back by charging higher rates than should be necessary. If you don’t pay those higher rates for X months, then they lose money and have a right to try and get it back from you.

Some day, some genius with a lot of capital is going to realize the profit potential in starting a cellular service that doesnt’ provide free phones or even reduced pricing on phones, but keeps their monthly fees as low as possible. I’d much rather pay an upfront cost for a phone (say up to $300) and pay $25 per month instead of a free (or $1) phone and pay $39 a month. I think most businesses would rather pay that was as well as consumers…

Jeannie says:

CA law on termination fees?

Hi there,

I saw your post about California law on termination fees. I was wondering if you could tell me where I could find that online??

My roommate and I are having a problem with SBC attempting to charge early termination fees, because he is moving into an area that they do not provide service.

We were told verbally that termination fees would NOT apply if service was unavailable, and they have changed their written policy to state otherwise.

Any help appreciated – please email me at above address.


Anonymous Coward says:

Re: CA law on termination fees?


I have the same problem with SBC attempting to charge early termination fee. I moved to a city where SBC service is unavaiable. I called the SBC customer service before I terminated the SBC contract. One SBC representative told me that a termination fee of $200 will not apply because there is no SBC service in my present area.

Any help will be highly appreciated.



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