US plan to cut phone cancellation fees angers groups

A proposal that would make it easier for US mobile phone customers to break up with their service providers was met with withering criticism by consumer advocates.

The plan would give consumers a break on fees charged when they quit their service early, but would also let network operators off the hook in state courts where they are being sued for hundreds of millions of dollars by angry customers, an Associated Press report said.

Mobile operators routinely charge customers €110 (US$175) or more for quitting their service early, the report said.

Under a proposal being reviewed by the Federal Communications Commission, the wireless industry would give consumers the opportunity to cancel service without any penalty for up to 30 days after they sign a cell phone contract or until 10 days after they receive their first bill.

The proposal would mean would companies reduce exit fees month by month so that the longer they stay, the less they pay, according to people familiar with the offer who spoke on condition of anonymity because the FCC has not approved it.

It would not abolish cancellation fees entirely and would not refund such fees to anyone who already paid them.

'If this plan goes through, the nation's largest cell phone carriers get a get-out-of-court-free card,' said Chris Murray, senior counsel for Consumers Union, the nonprofit publisher of Consumer Reports magazine. 'We have long opposed limiting consumers' rights to sue, and that seems to be what we're doing here.'

Another expert agreed.

'The consumer protections are an inadequate fig leaf to justify federal pre-emption,' said Patrick Pearlman, a lawyer with the consumer advocate division of West Virginia's Public Service Commission. 'The FCC is not an adequate policeman.'

The FCC has declined to comment on the proposal.

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