"An 'Illegal ETF' Destroyed My Credit. Can I Go To Small Claims Court?"

“Jurgis” writes,

Now that the California Courts have ruled that ETFs are illegal, does Consumerist have any advice for consumers, like me, who have an outstanding ETF debt with a non-Sprint carrier?

I ask because I canceled my 2002 Cingular (at the time) service due to horrible coverage, terrible customer service, and that I had to routinely call every stinking month to have bogus text message spam charges removed. I switched services, and after doing so, Cingular stuck me with a $270 early termination fee, failed to inform me of the fee or that it was going into collections, and next thing I know, I’m in collections for $580. I didn’t find out about this until recently, as I am about to purchase a new car and needed a copy of my credit report.

I initially refused to pay because my cancelling my service was completely justified on my part; the service and coverage I was told I would receive when I signed the contract was NOT at all what I actually did receive. I also refused because their raising of text message fees was a materially adverse change to the contract. Neither Cingular nor their collections drones care.

You can imagine my excitement to hear that ETFs are illegal. I would like to file a suit in small claims against the collections agency and ATT (as successor in interest to Cingular) to recover damages incurred as a result of their sending my account, erroneously, into collections over the ETF AND for attempting to force me to pay a fee which is now known as illegal.

Any advice or leads for advice would be greatly appreciated.

You should obviously talk to a lawyer for real legal advice, “Jurgis,” but for now you might want to break your problem into two separate issues:

  1. You have a collection on your account that you are disputing;
  2. That collection is an ETF, which may end up being illegal banned/voided in your state.

Forget about the legality of the ETF for now; you should file disputes with all three major credit reporting agencies over the $580 collection. The original problem exists regardless of what happens in state or federal court, which is that the company didn’t honor their side of the agreement, then failed to notify you that they were sending it to a collection agency.

As to last week’s news that ETFs are “illegal” in California, Sprint Nextel will almost certainly file an appeal. Additionally, the ruling might not stand if the FCC moves ahead with its industry-backed plan to step in and say states can’t regulate carrier fees. (And if they do, then that might be overturned if states take the FCC to court.) Update: according to outphase, this court’s ruling isn’t binding upon any other court, or even on itself.

Find a local lawyer to ask whether you can take advantage of the ETF ruling, but our guess is for your immediate needs it won’t matter.

That doesn’t mean you can’t try small claims court anyway, though, if you want to claim that Cingular didn’t honor its agreement and that their text rate increase meant you were given the opportunity to legally get out of contract. (Here’s a story of a reader who took this route with a subcontractor and won.)

(Photo: Getty