18 Comments

Summary:

Starting April 22, Verizon Wireless customers upgrading to a new phone will pay a $30 fee. The carrier suggests the fee is needed to continue providing helpful consumer service. To me, the fee is Verizon’s rising cost to do business being passed along to consumers.

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Starting April 22, Verizon Wireless customers upgrading to a new phone will be hit with a $30 fee. The U.S. carrier suggests the fee is needed to continue providing consumer guidance as phone choice becomes more complicated. From where I stand the fee is because Verizon’s cost of doing business is going up and it didn’t plan accordingly, so it’s passing the costs along to consumers.

Here’s the official statement from Verizon Wireless:

“On April 22, Verizon Wireless is implementing a $30 upgrade fee for existing customers purchasing new mobile equipment at a discounted price with a two-year contract. This fee will help us continue to provide customers with the level of service and support they have come to expect which includes Wireless Workshops, online educational tools, and consultations with experts who provide advice and guidance on devices that are more sophisticated than ever.”

Note that the fee isn’t for customers upgrading while still under contract. This cost is for people buying brand new hardware with a new contract. Essentially, consumers are paying to for the privilege to get a new phone with two-year commitment.

I realize Verizon Wireless isn’t the only carrier in the U.S. to charge a device “upgrade fee” but I believe this is the costliest fee out there. (I’ve always thought the “activation fees” were ludicrous too, but that’s another issue for another day.) And the reason for the new charge is ludicrous.

The monthly service contracts themselves should be paying not only for network services, but also for customer service representatives that are knowledgable enough to answer questions about handsets, platforms and services. And by most measures, Verizon already charges the most for its voice and data services. Essentially the U.S. premium provider just added more premium charges for little direct consumer benefit.

Sorry Verizon, poor planning on your part shouldn’t mean more money out of my wallet. I’m not even a current Verizon Wireless customer and I’m disappointed in this move. Maybe if I walk into a store and buy a new handset without talking to anyone, Verizon will waive the charge? Not likely….

  1. bostonphoneguy Wednesday, April 11, 2012

    You took the words right out of my mouth. This is just another BS way for the carriers to squeeze the customer.

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  2. I’m confused – If you upgrade to a discounted phone before your existing contract expires, then no $30 fee? I think that we don’t know this because the press release isn’t written in legalese (like the contracts are).

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    1. You might bypass the $30 fee but you’ll end up paying more for the phone if you’re still in contract and eligible for the subsidized upgrade pricing. That’s how I read it, although I can see the confusion.

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  3. It’s not the costliest fee, AT&T recently raised it’s upgrade fee to $36 from $18 and they do not care how long you’ve been a loyal customer. My first cell phone in 1991 was with AT&T and I’ve been with them ever since….I was not able to get the fee waived no matter how far up the ladder I went with AT&T execs. Shame. New customers get good deals and loyalty goes ignored. I may just have to switch carriers.

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    1. Thanks for that price check. Outside of the most recent iPhone, I’ve bought all of my devices unlocked and unsubsidized since January, 2010 so I’m out of date on these silly fees.

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      1. I am interested in buying an unsubsidized phone. However in the US, one does not get any price breaks with data or voice plans on unsubsidized phones. Subsidized phones remain attractive from this perspective.

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        1. Actually, my plan with T-Mobile was $20 less per month last year because I brought my own device. Not sure if they still offer that, but if you’re looking for a carrier that does support that model, I’d consider asking a T-Mobile rep. Regardless, your point is spot on because this type of discount is more of an exception in the U.S. and not the rule.

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      2. As Richard Koo noted below, carriers also do not give price breaks on plans with unsubsidized phones. That kind of makes their argument that they somehow have to “make up” for lost revenue on the subsidized phones by charging on the back end…i.e. “the rate plan” sound a bit like a lie. IF they have so much to make up for on subsidized phones, then they DON’T on unsubsidized phones, but those users are not seeing discounts.

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      3. I’m not buying the explanation, period. If I dine at a restaurant and the waiter mentions the specials, I would be outraged to find an extra $30 tacked on the bill for the ‘providing consumer guidance’.

        It would seem that what we’re talking about is _paying them_ for the privilege of selling us a product and the privilege of remaining a customer. Where are we today in America when both of those mean so little to companies?

        It’s ludicrous, and the next mention of this better involve the words “FTC inquiry into Verizon over…”

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  4. I am also confused. Verizon currently offers a $30 discount for customers that wish to upgrade their phones after their two year agreement ends. Isn’t this just a complicated way of saying they are ending the “new every two” discount?

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  5. Being charged to death for little things like this is the biggest drawback to Verizon. They’ve alienated my parents, who will be canceling service and moving to pay-as-you-go as soon as the current contracts expire, because they’re so sick of these sudden increases for absolute bullshit.

    My stepmom has to pay for a basic data package each month merely for the fact that her phone has a keyboard. It’s still one of those basic flipphone types–not running Android or an iPhone. It’s about 5 megabytes per month, which they say is for ‘email’ that she has never used. But they refuse to allow her to own a keyboard phone without it.

    Since they got on Verizon years ago, their bill has at least doubled over this sort of stuff. It’s ridiculous, and nobody is doing a thing about it. Somebody needs to pull these pigfuckers out of their holes and start inquiring over these practices. Why does Al Franken have the time to waste investigating Apple over some non-existent privacy issue, but AT&T and Verizon go largely unchecked over real anti-consumer measures as part of their business strategy?

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  6. Happens elsewhere in the world. Here in Canada the price is around $24.00 for activation fees.

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  7. Nice of them to charge me $30 in order to commit to pay them about $75 a month for the next 24 months. I’m so privileged!

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  8. When I bought my iPhone 4, AT&T just started a new 2 year contract from that point and I sold my iPhone 3 to someone who shipped it overseas. Previous to that, Verizon charged you an arm and a leg if you wanted to get a newer phone while you were still in an existing contract. Except for that very narrow window at the end of the contract. What I take this new thing to mean is that if you wait for that end of the existing contract, you can escape the “contract early termination” fees, but you’re still hit $30 on general principles. I’m glad I’ve resolved to never go back. This only makes me more sure

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  9. I think recent pricing events from these carriers illustrate the value in buying unsubsidized phones because you otherwise pay more in a two-year contract. This would also lend itself to the prepaid fee structure since there are some very well priced plans out there.

    Also, I think a version of a phone should be available on all carriers (e.g. iPhone) which is a great illustration of a competitive market. But the phon YOU want and use it on the carrier of YOUR choice.

    Carriers give absolutley no consideration to existing/long-time customers and we have the power to send strong message.

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  10. This is just another inflammatory click here news article to draw attention to this site. Think about it this way since all of the major carriers are doing this. They discount the equipment by hundreds of dollars in many cases. Much more than the fees charged. If they just upped the price of the phone by the “fee” amount you would also be paying sales tax on it, so really this is a way of raising the price of the phone without you being taxed on it. If you don’t like it, buy full retail, most carriers don’t require a service contract in that case so you can leave at any time.

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  11. Does this affect existing business or corporate customers or is that fee waived, no one seems to mention that??

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  12. Kevin I checked on a phone already and with the rebate it would still be more than resonable. About $50 anyway, I don’t like it either, yet we have to remember cost of living has gone up for everyone. They are no different. I don’t think it’s something any of us could plan for. Just from day to day items everwhere are increasing. Our in store services are still available…I think it’s a reasonable fee considering. Break it down and you’ll feel a little better $15 per year.

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