August 12, 2009

Sprint Nextel settles suit for $17.5M

Sprint Nextel said it will pay $17.5 million to settle a class-action lawsuit filed in federal court in New Jersey over early-termination fees.

The bulk of the settlement, $14 million, will go to cash payments to claimants, while $3.5 million will go to non-cash benefits, The Kansas City, (Mo.) Star reported Wednesday.

The suit claimed Sprint overcharged early-termination fees from 1999 through 2008. The overcharges amounted to $1.2 billion, the suit said.

Sprint also agreed to switch to a pro-rated termination fee structure, allowing customers who are closer to the end of their contracts to pay less in termination fees than customers who opt out earlier.

The settlement requires a hearing before it is finalized. One is scheduled for Oct. 21, the Star reported.