Feds May End Cell Phone Early-Termination Fees

Cell phone users can rejoice knowing that the government is stepping in to rein in the early-termination fee, one of the biggest blemishes of owning a mobile phone.

The plans being developed would benefit consumers and carriers, who are regularly taken to court over termination fees.

Under the proposal, consumers could get out of a cell phone contract scot-free up to 30 days after signing the contract or ten days after receiving the first bill. After that, the fee to cancel a cell phone contract would be reduced every month, essentially prorating the termination fee.

In response, the government would give larger cell phone carriers a "get-out-of-court-free-card," as Chris Murray, senior counsel for Consumers Union, put it, on any pending lawsuits over high termination fees.

This is obviously to only answer to the ongoing battle between the consumer groups and the wireless providers. Charging a $200-plus fee to cancel a contract whether it's the first day or last day of the contract is a bit absurd. On the other hand, the wireless carriers eat fees by subsidizing the cost of the cell phones and providing no start-up costs on many cases. Pro-rating the early termination fees is a good way to satisfy both ends of the deal.

And for the record, AT&T and Verizon have already initiated pro-rating early termination fees, and this move by the government would make it standard across all major carriers.

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