Sprint Says Wins Verdict over Cancellation Fees

A California jury rules in favor of Sprint Nextel in a class action suit challenging cancellation fees.

WASHINGTON (Reuters)-A California jury ruled in favor of Sprint Nextel Corp on Thursday in a class-action lawsuit challenging fees the company charges customers who cancel their service prematurely.

The jury sitting in the Superior Court of California in Alameda country rejected allegations by plaintiffs in the case that the company had improperly imposed the fees on customers who canceled their wireless service before their contracts expired.

Sprint charges customers $200 if they cancel their service before the end of a one- or two-year contract.

U.S. carriers such as Sprint, Verizon Wireless and AT&T Inc say the fees are needed to ensure they recover subsidies they provide for handsets that customers get under the most popular service plans, as well as other costs associated with those plans.

The case dated back to 2006 and is the first of several cancellation fee lawsuits filed against major wireless carriers to be decided.

Plaintiffs in the case included customers in California who cancelled their service between July 1999 and March 2007. It went to trial on May 12.

Early cancellation fees are a perennial complaint of wireless phone customers and have also drawn complaints from some lawmakers. Wireless carriers face class action lawsuits in several states challenging the fees.

(Reporting by Peter Kaplan, Sinead Carew; Editing by Jeffrey Benkoe, Leslie Gevirtz)

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