Wireless Early Termination Fees: Can You Hear Me Now?

Posted by: Olga Kharif on June 2, 2008

In the past few months, several wireless service providers — AT&T, Sprint Nextel, T-Mobile USA — began prorating, or announced they would prorate their early termination fees (Verizon Wireless began this practice back in 2006). What that means is, if your contract is half-way through, you owe the carrier only a portion of the penalty someone who’s just signed up will pay. In the past, all customers had to play a flat early termination fee.

What I am curious about is, have these prorated early termination fees encouraged Americans to switch their wireless service providers more often? Are you more likely to switch now that proration is in effect? Have you switched specifically because the penalty was lowered? Or does proration not play much into your switching decisions? (If so, what does?) I’d love to hear about your experiences. Please drop me a line in the comments here (please be sure to leave your e-mail address) or at olga_kharif@businessweek.com.

Reader Comments

Gus

June 4, 2008 12:14 PM

Just to comment on lousy business practices by Verizon Wireless.

I was a customer of verizon for a good many years without too many complaints. My daughter needed a phone so I gave her the privelege of using the second phone attached to the accoun. She used this for a while without regard to her minutes. she went over and the exrta put a bind on the amount that was due on the monthy bill. I was unabl to pay this bill because of my being on a fixed
income her being unemployed I was unable to pay the bill right away. I finaly did get enough to pay this bill, I went to the Verizon Store to tke care of this and have the phone turned on again.I asked the associate if the phone was still active, I was told it was and was told that the phone would be
turned on within the next few hours. I left with that thought. I waited a day for this to happen. then I called to see
what the problem was that it was still not on. I was told by CustServ that I had to call finance deptfor further service I called them and they stated I would have to put down a large deposit and a cancellation fee due because the service was completely turne off prior
to paying the bill on the same day after I was assured by their associate
that the service was still active after I paid the bill in full. The management at Verizon Still are sending me bill for Early Termination of my account, when his was not my doing it was their
doing. Get the money then cancel the account so we can charge the customer an
early termination and get a healthy deposit to let them enjoy our hospitality. The Gall and the Greed from
Big Businee in this country. Hang the
small guy we hold the upper hand what can they do about it. WHERE IS THE JUSTICE?

Daniel

June 8, 2008 9:42 AM

I probably should be using those "throwaway cells" but an employee purchased a phone with a 2 year contract. The past employee's phone is sitting idle. Due to the economy, I am trying to lower my operational cost. Pro-rating would allow me to close out the phone with out paying the huge termination fee.

Of course, as with all things, there will be abusers but in my case it would make for an intelligent business decision.

hpschroer

June 13, 2008 9:10 PM

If your readers want to do something about early termination fees, here is a way to get results. The FCC is considering taking some action which will take away your rights to challenge these fees in State Courts.

I attended the June 12 meeting at the FCC and spoke on the panel in behalf of 4 million Verizon customers who paid $175 each for an ETF fee. The Wireless industry has submitted a petition to the FCC, which, if adopted, will deny you your consumer rights protected by State Consumer Protection Laws.

If you want to stop early termination fees call the FCC at 1- 888 225 5322 and say you object to the Wireless Industry's petition covered by docket 05-194. or send an e- mail to fccinfo@fccgov.and object to docket 05-194

no

June 9, 2009 9:13 AM

It's clear that the wireless providers subsidize the phone handset which is why they require a cancellation fee.

If you don't want it then buy then prepare to pay for a phone when you sign up.

It's simple math really.

Post a comment

 

About

Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

Categories

 

BW Mall - Sponsored Links

Buy a link now!