Senator Amy Klobuchar, Democrat from Minnesota, has some issues with these ETF’s. She believes they are “anti-consumer and anti-competitive” and previously introduced the Cell Phone Consumer Empowerment Act which would have reduced ETF’s and required them to be prorated or reduced as you progress through your contract.

That bill never materialized but it did temporarily pull the telecoms off their pedestals forcing them to adjust their ETF policies. Unfortunately, many have rescinded those changes over the past few months.

The big issues with ETF’s lie with the telecoms. Many are deceitful and mislead the average consumer. Currently, over the course of a contract the ETF can increase and in many cases the ETF is larger than the subsidy the company offered for signing the contract. All of which are designed to hurt the consumer and benefit big business.

To fight this villainy Klobuchar has officially introduced a new bill: The Cell Phone Early Termination Fee, Transparency and Fairness Act. This act doesn’t mandate major changes but instead requires telecoms to be honest and not try to take advantage of the average consumer. Specifically, this bill will:

• Prevent wireless carriers from charging an ETF that is higher than the discount on the cell phone that the wireless company offers consumers for entering into a multi-year contract. For example, if a wireless consumer enters into a 2-year contract and receives a $150 discount with the contract, the ETF cannot exceed $150.

• Require wireless carriers to pro-rate their ETFs for consumers who leave their contracts early so that the ETF for a two-year contract would be reduced by half after one year and pro-rated down to zero by the end of a contract term.

• Require wireless carriers to provide “clear and conspicuous disclosure” of the ETF at the time of purchase.

• Require monthly billing statements to clearly state the pro-rated fee customers would be charged if they terminate their contracts before the end of the next billing cycle.

All of these requirements in my mind are no more than common courtesy. However, profit margins tend to cloud the judgment of decision makers and it’s clear only legislation can limit these bad business practices. I’m all about an open market but sometimes collusion between companies, in this case with ETF’s, only hurt the consumer.

What do you think? Should The Cell Phone Early Termination Fee, Transparency and Fairness Act be passed, filibustered, or enhanced? Should ETF’s be removed entirely? Let me know in the comments bellow or on twitter, @blue42richman.