19 Comments

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?

By Mike Gunderloy

You're subscribed! If you like, you can update your settings

Related stories

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

    Sigh

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

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

    Share
  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.

    Share
  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?

    Share
  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.

    Share
  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!

    Share
  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.

    Share
  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.

    Share
  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?

    Share
  11. Just Wondering Monday, August 4, 2008

    I find the notion that cell phones are subsidized amusing. I recently wanted to buy a blackberry 7130e and while this phone is very old from a technology standpoint, the ‘retail’ price is largely unchanged.

    How is that possible? Every other consumer electronics product cycle starts off high, and eventually becomes cheap.

    How come I can buy a new lap top for less than a new, ‘old’ cell phone?

    When wireless providers start treating consumers like adults, then they can start expecting us to behaving like adults.

    Share
  12. This advice is so very unethical, and quite damaging to the reputation of this blog.

    The deal combines a subsidized phone for a long contract with an ETF: it’s a loan for the device. Yes, it would be better for some if people paid the full price for the phone – but churn costs both the telco and yourself.

    Share
  13. No need to do anything illegal or even unethical to get out of your contract. I recently sold my phone and my remaining service contract on Ebay. If you find someone to take over your contract the mobile carriers typically have no problem letting you out of your contract.

    Share
  14. The deal combines a subsidized phone for a long contract with an ETF: it’s a loan for the device.

    The assumption that 2-year contracts are designed to subsidize phones is patently false. If you activate a line bringing your own phone, and cancel the line early, you still have to pay the ETF. So where’s the subsidy? Where’s the loan?

    And unlike, AT&T, T-Mo and Verizon, Sprint’s ETF isn’t prorated over the length of the contract– Sprint has no plans to prorate charges until next year. So if you want to terminate your line 14 months into your contract, you still have to pay $200. Again, this is not how loans work; if it were a loan, you would owe the balance due.

    Share
  15. I bought cingular service with an expensive phone but I had to sign a two year contract. Not too long after I bought cingular AT&T bought cingular. I moved to an area where my calls are dropped all the time and my voice mail isn’t delivered for days. When I tried to get out of the contract they charged me the full $175 — even though I only have 6 months left on it.

    When I pointed out the above, AT&T supervisor wanted to sell me an updated chip and some other accessories, even though i explained that there is no way to get service in this area. Wanted me to spend MORE money for crappy phone service I don’t want any more.

    By the way, Verizon works fine in this area, so I’ve had two cell phones to ensure adequate coverage. Also explained this to them.

    I say if you can figure out a way to get out of it, go for it. These guys will screw you seven ways to Sunday and not even blink an eye.

    Share
  16. I would have had no problem paying Verizon, say, a fee to switch to AT&T for the iPhone. My recent experience with AT&T leaves me steaming, though.

    The Blackberry I’d had for a year and a half broke. I thought it might be a good time to try out the iPhone. No go, since I was not yet eligible for a phone upgrade, I would have to pay an additional $200 for the iPhone.

    They also could not replace the Blackberry because the warranty on the device was only 1 year, though the contract was 2 years. So, I had to pay a “exception” upgrade price to buy the Blackberry – less than retail but more than I paid at initiation.

    To add to that, I had already had to replace the battery once on the Blackberry. At that time, the sales person had told me the BATTERY was not warranteed and charged me $50!

    If Apple finds another carrier in the next year or so, I will GLEEFULLY pay AT&T $200 to break the new contract I was required to sign to get a new Blackberry.

    Share
  17. I think I’m going to try the method that Sinistar mentions above. I can see there being some fine print, but it’s worth a try, and definitely better than the brute force approach of calling a bunch of customer service reps in hopes of finding that needle in the haystack that will help you out. Thanks for all the tips.

    Share
  18. I recently purchased a Samsung Delve, and signed a two year contract. I was leaving for winter vacation and was asuured I could get on line, check emails, financials the same as my desk at home. They did tell me we would not be able to use mobile to mobile, because they do not have a tower. I was considering a new phone or a laptop.
    What they did not tell me was I would not be able to attain DATA because they have no tower. I was gone two months with no way to check bank statements, financial statements.
    What advice to you have for me to apporach the phone company. I have been with them for a number of years and I have been pleased with their service, they have helped me by making changes in my service to meet my changing needs due hospital and nursing home confinements.
    We are early 80’s and watching our 40l K become a 101 K this expenditure did not meet my needs.
    babs

    Share
  19. Babs – sounds like you were missold. I would take it up with a lawyer.

    Share

Comments have been disabled for this post