AT&T Proposes Settlement in Early Termination Fee Law Suit

A proposed settlement from AT&T could mean the New Jersey-based class action lawsuit against the company over early termination fees is coming to an end. The cell service provider has proposed US$16 million in cash and $2 million in non-cash awards in the settlement.

The class action suit claimed AT&T's flat-rate fee for breaking a service contract before it expires wasn't legal, and by offering a settlement the company won't have to try to defend itself in court.

AT&T Mobility subscribers that were charged a flat-rate early termination fee between January 1, 1998 and November 4, 2009 are eligible to participate in the settlement and could receive up to $140. Subscribers that had a flat rate termination fee clause in their contract during that window, but didn't get charged the fee, are eligible for non-cash compensation through AT&T prepaid long distance calling cards.

The court is scheduled to rule on the settlement proposal on April 14, 2010, and settlement participants have until June 14, 2010 to sign up at the settlement Web site.