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Summary:

With the advent of the iPhone, plenty of web workers are thinking seriously about switching cell phone carriers. Others have the same impulse for a variety of reasons: a move to an area with poor service, a desire for a new phone that your current carrier […]

With the advent of the iPhone, plenty of web workers are thinking seriously about switching cell phone carriers. Others have the same impulse for a variety of reasons: a move to an area with poor service, a desire for a new phone that your current carrier doesn’t stock, or a disgust with poor customer service. But this impulse has to be balanced against the few hundred dollars in early termination fees (ETFs) that your current carrier probably wants to charge you to leave.

You may have heard that ETFs are now illegal. That’s not quite true; Sprint lost a decision in one case in California (and will likely appeal); Verizon settled a similar case out of court. The FCC has also indicated an interest in regulating this area. But for now, you probably do have a contract with one of these fees. Fortunately, there are ways to switch without paying.

So how do you avoid the ETF? One method is to just call up the customer service people for the company you’re leaving and argue with them. Some people have reported success from just making their way up the chain of supervisors, complaining of poor service, until they found one who had the power to cancel the contract and waive the fee.

A more promising route may be to exercise a legal right to get out of the contract. The best time to do this is when a new fee or a change in an existing fee has been announced by the company (like T-Mobile’s coming increase in text messaging rates); you can then argue that the contract has been “materially changed” and walk away without penalty. Here’s a video tutorial from someone who employed this same strategy with Verizon, though it apparently took a good deal of arguing.

There are shady ways to try to get out of the ETF; I wouldn’t recommend them, but in the interest of completion I’ll pass them along. One trick is to switch to e-billing (thus avoiding paper statements) and then change your address to a place outside of the company’s service area. Then you can cancel your service without penalty. (Though the company may want to see some proof of residency, in which case you may be in trouble). Another is to report your carrier to the local Better Business Bureau for terrible service, bad rates, and whatever else you can think of, and hope they cancel you rather than putting up with you.

One alternative that doesn’t involve trying to break your contract is to list your service with Celltrade, a company that brokers transfers of cell phone service. You can register with the site for free, but actually transferring your service will cost you a $19.99 membership fee. They’ve got nearly 1400 listings at the moment – so if you’re looking to get into new cell service without a full two-year contract they may be worth a look.

Have you tried to avoid an ETF on your cell phone contract? Did you succeed?

  1. “Why yes, I DO want my free/cheap phone, subsidized by a contract I’d like to get out of for.. free”

    Sigh

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  2. I won’t be checking this website anymore. Giving people ideas on how to be corrupt and lie is wrong.

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  3. That’s right Dave you make a stand!

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  4. @rickg: I’m sensitive to the notion that trying to duck the ETF is a way to have your cake and eat it too, by taking advantage of the subsidies on phones. In that regard, the decision of the California judge is interesting – she held that there was no evidence that Sprint’s ETFs were tied in any way to the cost of providing the phones. In her view, at least, these are merely punitive fees designed to blunt the effects of number portability on the carriers.

    @Dave: Leaving is your privilege, of course. I tried to make it clear that I am not in favor of the most dubious ways of avoiding the ETF, but in the interest of completeness, I felt they should be included; there are many sites with similar stories out there. But I don’t think either the Celltrade route or the argument that the phone companies are breaching their own contracts fall into that category. YMMV.

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  5. What if you have never received a subsidized phone from the carrier but they still feel you need to pay the early cancelation fee?

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  6. I moved out of the country as a freelancer and simply wrote a letter from my corporation saying that I had been assigned to work abroad. No problems, completely honest.

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  7. I paid Verizon the fee and switched. If your in a contract, and want an iphone, its easy. Just pay up and get out!

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  8. The contract fees are anti-competitive and not at all consumer friendly. I see nothing wrong with trying to get out of paying it.

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  9. Here is a simple way that I have used and have had others use with success at multiple carriers. Go in and get a new phone. What happens is that your provider is more than happy to sell you a new phone and with it a brand new two year deal. This is the key. In any wireless contract you have 3 business days to cancel without penalty. So, buy the phone (keep your receipts) and then go back in a day and tell them that you are unhappy with the phone and you thought it would improve the service and you’d like to cancel. There will be resistance because it is their job to make you happy and keep you in a contract, but just say you are done and contractually they have nothing to bind you.

    Good luck.

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  10. I am a longtime Tmobi customer (>2 yrs), however my kids upgraded their Blackberries last Noveember and May respectively.
    Q: Is the ETF in addition to the subsidy on the phone?
    Q: If I can avoid the ETF, would I still have to pay the subsidy on the phone?

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