By Linsey B. Knerl

Getting dinged with a hefty fee for early cancellation of your cell phone contract is a common practice. It’s what’s kept many of my friends and family in unsatisfactory agreements for up to two years. (Who can afford a couple hundred bucks just to escape?) This latest class-action lawsuit puts some of those fees back into the hands of the customers. Could you be affected?

So what did Sprint Nextel do wrong? While they claim no misstep in this legal action, they have been accused of using a flat-rate early termination fee (ETF) in their customer wireless agreement and that these fees violate the Federal Communications Act and consumer protection laws of the states and of the United States.

Who can benefit from this settlement? The language in the settlement is long (264 words just to name the class), but it basically includes subscribers of a contract with Sprint Nextel Wireless Service for personal or mixed personal/business use (sole business, corporation, and government entities are excluded from making claims) that began between July 1, 1999 and December 31, 2008 and whose claims relate to the Early Termination Fee.

In short, if you got hit with a fee for cancelling a contract that started during those dates, you may be eligible.

What must you do to benefit? While there will be a projected $14 million to disburse to claimants in the event of a completed settlement (with a hefty 33% going to legal counsel, of course), you have to file your claim to be part of it. The form is available via the official settlement website or you may call the following number to ask for a form to be mailed out to you: 1-800-916-6940.

Claimants should realize that this settlement will NOT entitle them to all of the funds they are out as a result of a previously paid early termination fee. (In fact, it’s a small percentage of the average fee, which ranges from $75 – 250.) Depending on your claim, you may be entitled to the following:

1) A $25 payment as a result of a paid and proven ETF (or a credit of up to $36 on a new 2-year contract and 100 free bonus minutes per month for the first year, minutes will not roll over). This is available to claimants who cancelled their contract during the first 3-6 months of service.

2) A $90 payment as the result of a paid and proven ETF (or similar activation and bonus minutes credits). This is available to claimants who cancelled their contract during the 7th through 24th month of their 2-year contract.

Claimants who can’t prove (but sign under penalty of perjury that they paid ETF fees) will get $25. There will also be fees paid to folks who were charged ETF’s but DIDN’T pay them (meaning they probably went to collections).

To make your claim, you must fill out the long form and have it postmarked by May 4, 2009 (subject to change). Any questions regarding the settlement should be directed to the settlement attorneys via the website, not by contacting Sprint Nextel, their attorneys, or the court. Good luck!