Your wireless carrier loves you deeply and they want you to know. That's why, if you try to break your contract with them, they'll charge you a fee of up to $350. It's just one of the many ways they show they care.
The rationale from the cell phone companies is they subsidize a part of the cost of your mobile device with the understanding that you will be paying for service each month for 2 years. Skeptics might point out that the major carriers don't give monthly rate discounts to those buyers who purchase and use unlocked phones, but that's another discussion. It used to be that each carrier could charge a flat rate early termination fee (ETF) if you left your contract at any time. However, the Federal Trade Commission (FTC) eventually stepped in (after a few carriers hiked their fees up even higher) with a cell phone early termination fee law forcing carriers to prorate their termination fees so that you pay less the closer you are to the end of your contract.
Depending on the length remaining on your contract, the carrier, and the type of device (smartphones cost more), you may be looking at a $50-350 early cancellation fee. Also, those who purchased their phones from a third party, like Wirefly may be even worse off than those who purchased from AT&T, Sprint, T-Mobile, or Verizon. In order to get that phone at a discounted price, you agree to an additional fee of up to $400 if you cancel within the first 181 days of your contract. Buyer beware!
But before you start forking over your hard-earned money, check out these ways you may be able to skip the fee and push through your wireless carrier divorce.
This option won't apply to everyone, but it's worth mentioning that you can usually cancel a new contract within 2-4 weeks without having to pay an early termination fee. You may be responsible for a restocking fee, but it will be much smaller than the ETF at the beginning of a contract.
Cell phone companies don't exactly run around advertising this, but you two are in the contract together. That means if they have changed the terms of the contract, you have a right to end the agreement. By law, your carrier has to notify you of these changes, but they may try to hide the info in your multi-page bill, so be sure to review it carefully. Generally, you have 14 days from receiving notice of the change to challenge it. When you call customer service, make sure to actually use the words "materially adverse" to describe the change to which you object. Be polite. If you're lucky, the rep you talk to will realize you are more educated than the average caller and let you out of your contract without torturing through 20 call transfers.
If you let the customer service rep at your phone company know that you are moving to an area with no mobile coverage, you may be able to wiggle out of your contract without paying the fee. It isn't a sure thing, but it may be worth a try!
Customer service is expensive. Every time you are on the phone with a customer service rep, you are costing your cell company money. If you have encountered terrible service and spent tons of time on the phone with your carrier, take it up a notch and you might be able to get them to end the contract for you. There's no need to be rude, patience and persistence are the key to convincing your carrier that you are just going to keep costing them money. Note: remember to weigh the value of your time against the ETF.
One woman's crummy, detestable cell phone carrier can be another woman's gold. If other methods have failed, you may be able to trade your contract away to someone else. Why would anyone else want your contract? Because along with the contract, they'll be getting your phone free, plus a credit to their first month's bill (the bill credit is less than most ETFs). Not to mention the fact that they won't be stuck in a contract for as long. Interested? Check out TradeMyCellular, CellSwapper, and CellTradeUSA to learn more.
Have you ever managed to get out of a cell phone contract without paying an ETF? Share your tips or horror stories in the comments below!
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