FAQ: Why you're still paying early-termination fees

It's been almost a year since a judge in Alameda County, Calif., ruled that Sprint Nextel's early-termination fees are illegal, and yet Sprint and every other major U.S. wireless operator still charges customers a fee for canceling their services before a contract expires.

So what gives? Why are these pesky early-termination fees still around if they are against the law?

That's a good question and one that many readers have asked me over the past year. Because I get so many questions about these fees, I decided to put together this FAQ to help people understand what the recent court decisions mean for them and to provide some information about where cell phone early-termination fees stand today.

Let's start with the most obvious question: What did the court decide in the cell phone early-termination fee case in Alameda County Superior Court in California?
In July 2008, the judge in the case found in a preliminary ruling that Sprint Nextel's early-termination fees were unlawful. In December, the court issued its final judgment upholding that preliminary ruling in favor of the plaintiffs.

Does this mean that the people involved in the class will get some money?
Well, the case is still being appealed by Sprint. But as it stands now, it is unlikely that anyone in the class will get money. And here is why. The court ruled in favor of the class members and ordered Sprint to pay damages of about $74 million. But before the judge's ruling, a jury had upheld Sprint's contract. And the jury found that members of the class had violated their Sprint contracts. As a result, the jury awarded Sprint about $226 million in damages. In the end, members of the class still ended up owing Sprint about $150 million. But Sprint waived its right to collect the money, so the net result was that no one gets any money.

But the court in California found that the Sprint early-termination fees are illegal. Does this mean that I don't have to pay an early-termination fee if I decide to leave Sprint now?
No, it doesn't. For one, the class involved in the lawsuit was only certified for members in California. So for anyone living outside of California, the ruling means nothing, because the court doesn't have jurisdiction.

What if I am a cell phone subscriber in California? Do I still have to pay an early-termination fee?
Yes, cell phone subscribers in California still have to pay the early-termination fee specified in their original contract. The reason is that the judgment in this case only took into consideration the specific facts involved in this particular case. It was not a blanket decision that all early-termination fees are illegal. Rather, the court ruled that this specific type of early-termination fee imposed by Sprint is unlawful in its current form.

In short, this means that cell phone companies can continue to charge early-termination fees. And if they are challenged in court--even in Alameda County or anywhere in California--the court might decide something different based on the specific facts in that case. So technically, it's not accurate to say that early-termination fees are illegal anywhere. Instead, the early-termination fee Sprint charged to consumers in the manner and for the time specified in this case was deemed unlawful. That's all.

What's more, the jury in this case deemed Sprint's contract valid, which means that anyone who doesn't pay their early-termination fee is breaking their contract and subject to the terms of that contract.

A Sprint representative has clarified the company's position:

"Sprint will continue to enforce contracts with current customers," said Matt Sullivan, a Sprint Nextel spokesman. "The court in its ruling did not prevent Sprint from charging an Early Termination Fee when a customer terminates his contract early."

Weren't there other lawsuits over early-termination fees? What was the outcome of these cases?
Yes, there have been a few other cases. Verizon Wireless was also being sued in California over early-termination fees, but the company settled the case in July 2008, agreeing to pay $21 million to former subscribers, who argued that the company's ETF was unfair and excessive.

Sprint is also defending itself in another class action lawsuit that is certified for a nationwide class. The case is being handled in New Jersey, but will cover plaintiffs from former Sprint subscribers in every state, except California. A Sprint spokesman said that the company is close to a settlement in this case and that the terms are similar in scope to the ones in the settlement that Verizon Wireless agreed to last year. A settlement in this case would also lay to rest all other cases against Sprint for early-termination fees, except for the case in California, which is still in litigation.

So it seems like all these class action lawsuits haven't really had much of an effect on the industry since I still have to pay an early-termination fee. Is that true?
Well, not really. The lawsuits and consumer outrage over these fees, likely prompted Congress and the Federal Communications Commission to take notice, which resulted in some public hearings regarding early-termination fees. The FCC had even considered regulating early-termination fees to establish a national policy. But the agency decided to back off, because the industry was taking action on its own.

What have cell phone operators done to change their early-termination fees?
Over the past few years, all four of the major wireless operators in the U.S. have begun prorating their cell phone contracts.

Verizon Wireless was the first to adopt a pro-rated policy in 2006. And now almost every Verizon subscriber has a prorated early-termination fee as part of their contract. AT&T was next. As of May 25, 2008, all new AT&T subscribers have had their termination fees prorated over the life of their contract. For both Verizon and AT&T subscribers, the early-termination fee starts at $175 and is reduced by $5 every month over the life of the one- and two-year contracts.

T-Mobile USA began prorating its early-termination fees on June 28, 2008. Since then, new customers with a one-year or two-year contract have seen their early-termination fees drop from $200 to $100 if they end their contract with 91 to 180 days remaining on their agreement. If they end a contract with fewer than 91 days left on it, they pay a termination fee of $50. Customers who terminate their service in the last 30 days of their contract either pay the $50 fee or their standard monthly charge, depending on which one is cheaper.

Sprint Nextel was the last of the four major wireless operators to offer a prorated contract. As of November 2, 2008, Sprint adopted a policy that drops the $200 early-termination fee by $10 increments beginning in the sixth month of the contract. This means that by the 15th month of the contract, the ETF is down to $100. The new policy applies to both new customers and those who are renewing service agreements, so long as they signed up or renewed their contract after November, 2, 2008.

How can I avoid signing a contract with my wireless provider and avoid an early-termination fee altogether?
All four major wireless carriers offer customers alternatives to contracts. There are prepaid services that allow customers to pay in advance and do not require a contract. Most of the providers also offer the option to buy a handset at full retail price without committing to a contract. Of course, this also means that customers have to pay full retail price and cannot get a free or subsidized phone. Customers then pay service charges on a month-to-month basis.

A few consumer advocacy groups have recently asked the four major wireless operators to waive their early-termination fees for people who have been laid off and can't afford to pay their cell phone bills anymore. Are any of them considering doing this?
No, but wireless operators aren't completely heartless. Most of them allow customers to downgrade their plans to save money without restarting the clock on their contracts or incurring penalties.

But what if I can't afford my pricey data plan anymore? Can I get rid of that and downgrade to a voice-only service?
This is a tricky one. And before you decide to do anything you should check with your carrier about their policy.

Verizon spokesman Tom Pica said that the company deals with these types of issues on a case by case basis. Customers who are having trouble paying their bills can talk to Verizon customer service to work out a solution. But Pica advises people who are struggling to contact customer support sooner rather than later.

A Sprint spokesman said that if a customer with a separate data plan wants to drop that plan and go to a voice only plan or go to a lower data monthly plan, there is no early-termination fee. But, if the customer has a BlackBerry device, which requires a BlackBerry data plan, the customer must swap out his handset to avoid an early-termination fee. If the customer buys a new handset, the two-year contract clock restarts, but if he activates a handset he already owns, there is no early-termination fee.

A customer with a phone and separate 3G wireless data card for his laptop who cancels his data service will be charged an early-termination fee for the data card service. The easiest way to think of it is that the early-termination fee goes with the equipment.

[RobertAPierce]

Consumers continue to allow themselves to get fleeced by the providers and their anti-consumer contracts. I ditched the contract a long time ago and haven't looked back. Unless your job involves talking on the phone on the go a lot, there's just no need to have a cell contract plan.

[Belinus]

Same thing w/ Text messages. Those things are astronomical in price and consumers allow them to charge for it. IIRC, the same amount of data to download a single MP3 would cost over $500. Then there is the story of the girl in Wyoming who racked up a $5,000 cellphone bill by sending 20,000+ messages.

[setjeff15081947]

Mr. Pierce has it right ... as does "Belinus". The wireless industry, with its phone promotions and 2-year contracts, has been sticking it you-know-where for years. But a little more hollering on our parts, and they will receive the regulatory whipping, from "Obama-Pelosi", that they so richly deserve. Until then, I'm considering Mr. Pierce's suggestion and investigating pre-paid plans; they're out there, and they are pretty darned adequate. You having a good time, Sprint-Nextel? Or, haven't you lost enough customers yet?

[Lerianis3]

Belinus has a good point with the case of the girl in Wyoming..... I wasn't angry at the girl (AT&T has a control on their phones where you have to activate texting online or in store before it will work), I was angry at her cellphone provider for not having or USING that same control that AT&T uses.
I really thought that the father should have sued his cellphone company over that.

[chasahomyjr]

I'm still confused though. If a provider terminates your contract why are you still liable for an ETF? Verizon ended my contract when they sent me a bill for over $1200 after they terminated my contract within a few weeks for not paying a $400 bill, which was three times my normal bill. I never was able to get an honest answer from anyone at Verizon as to why my bill jumped so much in one month, since my usage didn't change and no one had gotten hold of phone and ran it up. All I was ever told was I had to pay it. Needless to say I left them with the bill and will never have anything to do with Verizon, period.

[Renegade Knight]

You were terminated for non payment. That's probably in your contract. If Verizon terminated you for it's own reasons then they would not be due the fee.

When you get a suprise bill you can dispute the bill, but you still have to pay. You may be lucky and not have to pay the amount in dispute. It's all in the contract.

[ittesi259]

Then enjoy the calls from the collection agency and the ding to your credit for not making more of an effort to work that out.

[jlt0x]

Again, check your contract. Your provider may have charged you the full-price of your cell phone also. As result of non-payment, they will cut your service. This results in fees to cut the service, fees to coup the cost of the phone (original full price), and existing service charges (full & partial month of service). The "mouse print" is scary. You may be able to settle for your original $400 bill if you return the phone.

[EatMoreBread]

Most people go over their plan and simply don't realize it. Maybe they went over their minutes or used a lot of text messaging, or did some data surfing, or purchased some games/apps, or a combination of these. If you did go over minutes or text messaging and got stuck with a large bill, you can usually contact customer service and agree to a more appropriate plan that gives you enough minutes or messages and in exchange they'll eliminate the charges. Or maybe the high bill was because of a mistake, that happens too.

Sometimes if there is a problem that takes your carrier some time to fix, they'll adjust when your next payment is due so you don't get charged a late fee or have your account deactivated and written off to collections. Make sure to ask for this if the error takes some time for them to correct, just in case.

Regardless, you can't just decide not to pay because you have a problem with how big your bill is (as much as we might like to). I see this happen quite often and, frankly, it's baffling to me. Your carrier is well within their rights to shut off service to people that don't pay their bills; it's only fair. Of course, you can take this "shove it" approach if you're willing to deal with the financial consequences. Just remember, sweeping it under the rug and forgetting about it doesn't solve the problem.

[gsekse]

Remember that they probably put a hit on your credit report. If they did, you have the right to put a response into the file that will be printed along with the Verizon's claim. This can cause some creditors to ignore the claim as a "reasonable" disagreement. Depends on how important your credit score is to you.

[EatMoreBread]

Accounts being suspended and/or cancelled for nonpayment is so common that most creditors won't assume it's a legitimate disagreement, they'll just assume you didn't want to pay your bill anymore and stopped making payments, since that's the most common reason for nonpayment when it comes to mobile phone service.

Can't hurt to try, but I doubt most creditors would believe it, even if you did have a legitimate disagreement where you weren't at fault.

[TimGray--2008]

It's the consumers fault. All of you agree to the insane conditions these companies put on you. It's your fault.

Want to avoid it completely? Go online and buy a unlocked phone. then go get your phone service without renting-to-own a phone from the phone company. No you cant afford that super trendy margerita blender phone/42"TV they will sell you for $199 with your 6 year contract, you will have to actually pay for the phone you want at full price.

I will never buy a locked or rental phone with a contract ever. Unlocked is the only way to go.

[EatMoreBread]

*sigh*

If only it was actually that easy to do in the U.S.

Fact is, most carriers in the U.S. make you sign contracts to start up service, even if you are willing to pay the unsubsidized price on the phone. Only those existing customers whose original contract have expired have that option, and with most phone price points starting at $200+ for even the most basic phones, it's just not worth the price.

The most optimal solution I can see would involve open networks that all use the same mobile technology so that handsets are mostly interchangeable with each carrier; that'd make switching to competing carriers easier and make them work harder to keep existing customers.

Then you'd have to create enough incentive for companies to lower unsubsidized phone prices because right now, they're pretty ridiculous. Unfortunately, the most surefire way to do this is to get more people willing to pay the full price on a phone, thus creating more incentive for handset manufacturers and carriers to sell the phone for a lower price. But that's a chicken-or-the-egg situation.

Even then, carriers pay a lot of money to get exclusives on phones, and forcing phones to be unlocked would eliminate that market.

I'm optimistic that most carriers have committed to use the same 4G data technology, LTE. Unfortunately, like I said, it's going to be used for data, with voice calls still being used on a carrier's old network. Perhaps further down the road, we may see true interchangeability across networks, but it won't likely come soon.

[codynews]

A cancellation fee, as much as I don't like them, is part of many of the contracts signed between a buyer and seller. I don't care what some judge says in California, he can't determine a contract between two parties.

I'm sure it's been stated but it's those contracts that allow people to get cheaper phones. If you don't want to be in a contract, then go pay full price for a phone. Simple.

[Renegade Knight]

When I checked I didn't even have the option for less than a year buying a phone from whatever source. Maybe some cell companies offer a month to month if you walk up with a phone. You also can't walk down to the electronics department and buy a cell phone the same way you can buy a land line phone. Land Line PHones just work. Cell phones if you can find them, have another level of complexity.

[clamenza]

@Renegade:

Yes, you do. Everyone has a choice. There are two major types of phones, CDMA (Verizon) and GSM (almost everyone else). Ebay and lots of other sites have thousands of phones on sale, new and used, and you can even buy a phone from AT&T at full-price and bring it to T-mobile. The so-called complexity comes from the differing systems I mentioned, and not from ETFs.

There's no reason to complain unless you don't know what you're talking about, or just want cheap phones without a contract, but there's no free lunch here.

[ittesi259]

A judge most certainly can determine a contract if said contract is found to be illegal.

[pentest]

When consumers have the ability to actually negotiate these contracts, you can start talking about this being a contract that both sides agreed to.

[Brandonius Maximus]

Judges can and do invalidate portions of contracts *all the time.* There are all sorts of things people agree to that are not legally binding. Non-compete agreements in California, excessive security deposits on rentals, etc. And these are adhesive contracts anyway, so judges look at them far more strictly than standard negotiated contracts between two parties of similar standing.

[ccmike72]

you negotiate these contracts with your feet and your money. Don't iek them don't sign. Go prepaid

[gecko21]

Of course a judge can determine a contract between two parties! That's why we have contract law and the UCC. Contracts can be found to be void/voidable for a number of reasons (economic duress, unconsionability, lack of consideration, undue influence, etc.). When you have a big corporation who gives the consumer little or no choice, it's called an adhesion contract (unfair bargaining powers, boilerplate agreement). In this case, the judge is going to look at what a reasonable person is going to believe he is signing when signing the contract.

I agree with you that the contracts help people get phones at a subsidized price, but a judge will always have a seat in equity when it comes to deciding the enforceability of a contract.

[clamenza]

The complaints about ETFs are stupid. You can pay for your full-priced phones and I'll continue to pay $50 or less for a fashionable, full-featured phone.

[Brandonius Maximus]

No, they're not stupid. If you'd bother to think about it for a second before running your mouth you'd understand that what is actually stupid is paying the full ETF after canceling 23 months after the start of a 24 month contract. That's what is being knocked down in the courts. Before these court decisions, they weren't pro-rating the ETFs based on how far into the contract you are (as is *required* by California law. . .). Fees have to have some basis in an actual cost to the company charging the fee. It doesn't have to be the same, just some reasonable connection. But the cell companies have not been reasonable until recently.

[EatMoreBread]

@Brandonius Maximus

The prorating of ETFs by carriers seems to be a more reasonable approach than fixed ETFs, considering the entire point of ETFs are to help the carrier recoup the cost of the phone that they were going to get over the course of your contract. But, like you say, by month 23, most, if not all, of that money has to have been paid back already, so why charge a full ETF for these customers? It's good that carriers have decided to introduce a little sanity in that aspect of the mobile phone industry.

The underlying problem with long-term contracts is that while they certainly make mobile phones cheaper and much more accessible, they also greatly reduce incentive for lower unsubsidized prices by handset manufacturers. If most customers opt to sign a contract and buy a phone for very cheap, then that makes it harder for those who don't, won't, or can't sign a contract to get a reasonable price on a phone. For example, the unsubsidized price on the new Samsung Instinct S30 on Sprint is $449.99, and considering the phone's capabilities as well as the fact that it's not a smartphone, that just seems ridiculous!

[Lerianis3]

EatMoreBread, the carriers didn't do ****. It was CALIFORNIA'S LEGISLATORS who put their foot down (with the iron 2 ton boot!) and told these companies "PERIOD! Pro-rate ETF's or go to jail or be shut down!"
I give these companies NO credit for that, and in other states.... they still have not pro-rated their ETF's.

[sparrowhyperion]

I'm sorry, but I don't see any reason that someone would absolutely NEED to have all these weird features and things. If you want to play games, get a PSP, if you want to listen to an MP3 player. The reason the carriers get away with these outrageous prices is because morons with more money than brains will actually PAY THESE RATES... I have no pity for someone who gripes about a contract and early termination fees. I use Virgin Mobile with no contract. I have no monthly rate and I only pay for what I use. My only limitation (and it is very minor), is that I have to make sure to top up my account a minimum of every 90 days with a minimum of $20. Beyond that, it's great. Oh yeh, what I don't spend on service stays in my account so I can save up leftovers and upgrade my phone periodically for no additional expense. Now that's a good deal. I do NOT need to play games on my phone. I do NOT need to use my phone for music, and I certainly don't need any of the useless and overhyped "features" of most of those overpriced contract phones. and people... Whoever is spending the prices Apple wants for thier Iphone needs a reality check... "IT'S a Freakin Phone...!!!" it is not gold encrusted, it is not made of platinum, it's JUST a PHONE....... " So you only have yourselves to blame for the idiotic prices they charge for this waste of time. If you just HAVE to be the lead Herdbeast amongst the other Apple Cattle, then go on and waste your money..." This is yet another example of what happens when you take natural selection out of the evolutionary equation.

[codynews]

Maybe it's "just a phone" to you but I need the features of my iphone as it allows me to work outside of my office. I can drive around and do customer visits with out having to bust out my laptop to check e-mails, arrange and view my calendar, view .pdf proposals and .ppt presentations, etc.

I don't gripe about the price because I get what I pay for.

[dbrohamTV]

lol the iPhone is not a "phone". Most people don't get that. It's a portable computer, with phone features that I rarely use. I am also using it without a contract, and paid full price for the device.

The only thing we "need" is food, water and reasonable security. Everything else is a want.... including your beloved/cheap phone.

Inferences about natural selection might warrant some analysis in a nearby mirror.

[d3vildog69]

on't kid urself.. the iPhone. Is just a phone... its a computer when you can actually be productive with it. At most its a very personal assistant. Nothing like a computer.

Can you do spreadsheets? Nope...
Can you do .doc or .odt? Nope...
Can you do anything but manage contacts and calendars and a few other useless applications on the store... nope

Great phone don't get me wrong. But its just a Phone... Get a Life

[B-Ri]

sounds like maybe you can't afford the iphone. The iPhone is in line pricewise with other smartphones and for those of us who use smartphone capabilities it is a great phone. You don't have a use or NEED for it fine, but don't throw labels at people you don't know just because you have a little anonymity and a grudge.Sounds more like you need to "evolve". Or better yet just grow up.

[EatMoreBread]

@sparrowhyperion

I'm glad that Virgin Mobile satisfies all your needs in a prepaid mobile phone carrier. They certainly have good prices. If I wanted a dirt-cheap prepaid mobile phone, I'd pick Virgin Mobile, too. But it's incredibly narrow-minded to think that everyone should choose the same mobile phone or carrier that you did. Prices in an economy are consensus-driven. The reason that people choose other carriers than yours are because they believe the price is worth what they getting in exchange. So don't insult them just because need more than a $20 Kyocera to fulfill their needs.

[ReVeLaTeD]

I require a BlackBerry. It's not an option. I NEED a BlackBerry and what it offers me. If you're hooking into corporate email, RIM requires a special plan. If you're getting your personal email, RIM requires a special plan. Either way, you're getting locked into the plan for having email.

"But other phones get email too!!!" Sure...but not as effectively as the BlackBerry. There has not been nor will there ever be a device that does email better than a BlackBerry - referring to cellular devices, of course. Either the keyboard sucks (Windows Mobile devices), the activation or other features are restrictive (iPhone), or the service just sucks (T-mobile).

"But why can't you just wait for your email???" Waiting for an email to come could mean the difference between getting paid and not getting paid. If I get an email inquiring about a product I'm selling, I need to get right on it. Not in 5 minutes. Right away. Otherwise that customer will find someone else selling the product. That's not acceptable.

Bottom line - don't assume that people don't need the plans or services. I don't like the ETF any more than anyone else here. But I find a carrier that provides the service I want - Verizon is such a service, so far at least - and stay with them. Then I don't have to worry about an ETF.

[supert1020]

I have a AT&t tilt its a windows mobile phone that does everything i have 500 songs 500 pictures a few movies a few games a bunch of other programs and no its not JUST a phone its my mp3, video game player, picture viewer, movie player, GPS, camera, camcorder and laptop. its the only device i need. Why would anyone want to carry around more than one device? I carried a bunch of devices that did different things for along time then the Tilt came out and replaced them all. I am very happy to have one device that does everything thank you.

[Michael1878]

Sprint canceled my contract because they found out i was downloading information from http://www.salviasociety.org they thought salvia divinorum was an illegal drug so i had no right to download information from that site, but later i told them it was legal so they reinstate my contract and refunded my fees so i guess sprint isn't all that evil. they make mistakes but they fix them too.

[tech_crazy]

And even if the site was illegal, Sprint would not have any right to block the site or cancel your contract unless it was explicitly stated to that effect in your contract. And even that could be disputed.

[EatMoreBread]

@tech_crazy

You better believe that kind of clause is in the contract. They don't want to get sued (or worse) for possibly being a party to any illegal activities.

[Lerianis3]

EatMoreBread.... no, those clauses are NOT legal and as a ISP (common carrier), they cannot be sued solely for providing service. Guess what? They CAN be sued if they are monitoring your service...... so they might want to stop that bullcrap before they get the smack down!

[Vegaman_Dan]

As I read this, cellular service providers in California will still charge you the early termination fee, however you will need to take them to court on a case by case basis to get the money back.

Yeah, I can see how that would work well for the courts- is anyone going to take a day or two off work to go to court for a $250 fee?

[seb33sf]

Right, few people will bother going to court (even small claims) over such a small amount.

This is, however, a better approach than ignoring the bill (like the first poster did).

[ofmyony]

Don't sign contracts. Use Skype at home and in hot spots via wifi. Watch them go bankrupt and when they go out of business make sure you send them a nice text message.

[outlaw26r]

I agree that VOIP will become the new service. Just hope its not skype. They would be a good bridge but will have to change their business model if they take over. They make money on you using the traditional phone service. What happens when they cannabilize it? I hope someone comes up with a long term business model that is profitable for them and ends up with a better product for the user. Skype is buggy as hell and I very much don't enjoy using it. Every time I turn it on, I end up monitoring it like it was the commo gear I carried when on missions in Iraq.

[EatMoreBread]

@ofmyony

Yeah, because Wi-fi is just so abundant, Skype's just going to completely devastate the mobile phone market. Ha.

/sarcasm

VoIP is most definitely where mobile phone technology is going, since it offers so many advantages compared to the traditional circuit-switching model, but as much as you just love Skype, they're not going to dominate anything.

[bryooo]

I use clearwire moble card on laptop with a magic jack for $20 a year + $46 month moble
internet and I can do a lot more than an iphone.

[seb33sf]

I am curious as to how these customers are getting their day in court, given that virtually all contracts nowadays seem to include a binding-arbitration clause. Anyone know?

[ccmike72]

In California you the right to opt out of arbitration if you opt out in a certain amount of time after the contract is signed. And in some cases companies don't include arbitration in contracts in California. Not sure the details in most phone carries contracts though

[seb33sf]

Ah, that makes sense. I probably should have known this since I live in CA. Thanks for your reply!

[clokverkorange]

I can say as a fact that AT&T will not work with you if you lose your job. I contacted them the very day I found out I was going to get laid off, and they were very unreceptive. I asked about suspending - not canceling- my account, and they were very emphatic that not only could I not suspend my account, they would continue to charge me until the 90 day late policy forced them to cancel my account. They were also kind enough to tack on an early termination fee, even though I had contacted them well before I was unable to continue paying for the phone. What kind of sense does this make - if I can't afford to pay the early termination fee, what makes them think I was able to afford three months of late charges PLUS the early termination fee?

As an aside, don't rest your hopes on Wi-Fi. "Free" and "Good Business" don't seem to go together, as evidenced by the "success" of the Prius. Toyota stopped making it and California mysteriously "ran out" of carpool lane stickers.

[ccmike72]

Those sticker where set at a limited amount to begin with. Not to mention hybrid drivers never should have got them in the first place

[BlackPenguin]

wait . toyota stopped making the prius? when did this happen? I just went to toyota.com yesterday and i could get a new prius.

[EatMoreBread]

@BlackPenguin

He's pulling your leg. : )

At least, I hope he is, because the alternative is that he actually thinks Toyota isn't selling one of their hottest cars anymore. Have to laugh at that one!

And bad customer service is a staple of pretty much every business, unfortunately. Most times if I get bad service or an answer that I know is wrong or doesn't make sense, I either ask for the supervisor or redial and try to get someone else. That usually does the trick. Couldn't say, however, if AT&T is making it a policy not to be lenient with their customers, but that seems like a poor business decision, given the state of our economy.

[vlora1987]

really stupid $20 a year + $46 month moble internet and I can do a lot more than an iphone.

An aside, don't rest your hopes on Wi-Fi. "Free" and "Good Business" don't seem to go together, as evidenced by the "success" of the Prius. Toyota stopped making it and California mysteriously "ran out" of carpool lane stickers.
http://officialtech.com

[ccmike72]

Nobody is forcing you to sign a contract and you as a consenting adult are responsible for the contents of that contract. you get a free or reduced price phone for an agreement o subscribe to service for X years. What is unfair about that? They need to recoup the money they invest in you, i.e. subsidized phone etc therefore they have cancellation fees. For sure all cancellation fees should be prorated and now with most all carriers they are.
If you bought a phone and service an two months later the service provides said yeah we just don't want to provide you service you would be pissed you wasted money on a now useless phone. Turn the tables and see it from a different angle. This is business not charity.
Research your service provider, plans, phones, etc.. Also i believe some companies allow you to void the contract and return the phone withing a few days or a week. enough time to evaluate their service.
I don't understand the problem people have. I'm on my 5th contract 2-2yrs w sprint, 1- 2yr with tmobile, and, 1- 1 yr with verizon. No problems.
And if you can't hold a job (present economic situation not withstanding) or afford the what if scenarios buy a prepaid.
A cell phone is not a necessity nor is it a right. It is a luxury and you should treat it as such.

[ccmike72]

in addition to my comment. Service providers should try to be reasonable and provide options for suspending service or create other solutions in times of particular hardship. obviously this would have to be case by case.

[Lerianis3]

And how many people can ACTUALLY understand all the junk in those contracts? Answer: NO ONE! Even myself, as a PARALEGAL, had problems understanding what the freaking contracts from: Comcast, AT&T, Verizon, etc. are actually saying!
Even my boss has problems, and he's got 40 years of law under his belt!

It is simply PAST TIME TO MAKE THESE OBSCENELY COMPLICATED CONTRACTS ILLEGAL FOREVER! Either plain language, or ****!

[grtgrfx]

@ccmike72

"They need to recoup the money they invest in you, i.e. subsidized phone etc therefore they have cancellation fees."

Sure is easy to sell a $400 phone for only $200, be charged $75 by the manufacturer, then charge your customer between $1,500 and $2,500 over the lifetime of a 2-year contract (depending on data plan or not) for service that costs you about $200 out of pocket. Yeah, I'm crying in my beer for all the poor telcos and their wafer-thin profit margins.

ETF charges are nothing more than a final gouge to the consumer and an extra profit center to make up for lost late fees and overage charges they expect you to otherwise rack up over your term.

[rpvitiello]

Ok I have a few questions to raise.
Why would you buy a unlocked phone when it is cheaper to buy it with a contract, pay for one month of service and pay the cancellation fee.
Why would you buy an ?unlocked? phone that will only work on one carriers system anyway?
Why would pay full price for a cell phone just to not have a contract with your service, when you don?t get any discount for not ?renting to own? you phone?

If a cell phone company started pricing cell phones reasonably and gave a discount on service for not renting to own with a contract I would be all for paying more for a handset and not having a contract with an early termination fee. The problem is most companies JACK up the retail price of the handsets to well over what a contract cancellation fee is to try and encourage you to be locked into a contract. If a phone is $50 with a 2 year contract, and worse case scenario has a $175 cancellation fee why would I pay $400 for the phone retail?

Next is you don?t get any discount on service. If I walk into a phone store with my own unlocked cell phone for a wile they would STILL make you sign a contract to start, if that changed that is news to me. They also do NOT give you a break on the service fees. If the fee for service with or without a ?rent to own? phone is $40 a month what is the point in coming in with an unlocked headset I paid more for when I am still paying the higher rent to own rate per month? If they offered a plan for $40 a month with a rent to own phone, and say $30 a month with no ?free? phone that would be fine, but either way you are paying for that phone you are not getting.
Also with say Verizon, they are really the only CDMA carrier in the US, so what good is paying more for an unlocked CDMA phone when if I switch to AT&T you need a new phone anyway. The only ?pre-paid? services running on CDMA tech actually run on Verizon?s network anyway with a 3rd parts reselling the service.
If I could walk into a cell store, buy a handset at a fair market value (not grossly inflated rate) and then get a DISCOUNTED service per month for NOT having the company subsidies my phone than great. But why am I going to pay WAY over that the phone is worth just to have the pleasure of paying the full ?rent to own rate? on a phone I already paid for.

Oh and until recently prepaid service was a joke. You paid ALLOT more for the same amount of talk time and you paid allot more for the headsets. Unless you were ONLY using the phone for emergencies (which if that is the case 911 works on any phone with service or not) it was worth it to pay the cancellation fee with a contract. Unless you are a drug dealer changing numbers once a month it was just not worth the cost for a pre-paid over a contract even factoring in the cancellation fee.
The only change to this that I see is that some companies like sprint are offering unlimited ?boost? prepaid, which is less expensive than their sprint brand contract version. This is getting close to what I mentioned of getting a discount for paying full price for your headset and then paying less for service. Now if only more headsets and features were available and on different networks we would be good.

[timsimonshow]

WOW. Swing and a few dozen misses.

"Why would you buy a unlocked phone when it is cheaper to buy it with a contract, pay for one month of service and pay the cancellation fee."

Because even if you abuse the carrier's subsidy, you still have to unlock the handset for use on other carriers' networks. In addition, if it is a CDMA phone, there's ESN registration with your current provider, AND you have to reflash the phone's firmware to work with your network.

"Why would you buy an ?unlocked? phone that will only work on one carriers system anyway?"

Clearly, you do not understand the mobile phone definition of "unlocked" (although I'm not sure HOW you missed it).

An unlocked phone has no restrictions, and, as a result, you can use the phone on ANY provider that uses the same technology (e.g. AT&T and T-Mobile use GSM technology; you can use your unlocked AT&T phone on T-Mobile's network or any compatible GSM network)

"If I walk into a phone store with my own unlocked cell phone for a wile they would STILL make you sign a contract to start, if that changed that is news to me."

WRONG, WRONG, WRONG, WRONG, WRONG. Mobile carriers will not turn away any potential revenue stream. You can walk into nearly ANY GSM retailer with an unlocked phone and have it activated before you leave. The only instance where you may meet resistance is if you are required to pay a deposit. A deposit is not an implication of a contract.

"Also with say Verizon, they are really the only CDMA carrier in the US,"

WRONG AGAIN. Sprint, Cellular One/Dobson, U.S. Cellular, MetroPCS, and Cricket (among others) USE CDMA EXCLUSIVELY IN NORTH AMERICA. They do offer GSM capable phones for international roaming, but use CDMA in the United States.

"The only ?pre-paid? services running on CDMA tech actually run on Verizon?s network anyway with a 3rd parts reselling the service."

Wow, you haven't gotten a single thing right so far. Virgin Mobile runs on Sprint's CDMA network, Boost runs on Nextel's iDEN network, ESPN and Disney Mobile ran on Sprint's network, Cincinnati Bell's i-wireless service offers GSM service on CinBell's Network, and a CDMA version on Sprint's network.

"You paid ALLOT more for the same amount of talk time and you paid allot more for the headsets. Unless you were ONLY using the phone for emergencies (which if that is the case 911 works on any phone with service or not) it was worth it to pay the cancellation fee with a contract. Unless you are a drug dealer changing numbers once a month it was just not worth the cost for a pre-paid over a contract even factoring in the cancellation fee."

It's "a lot" (quantitative adjective), not "ALLOT" (verb; to distribute). You also seem to ignore that in many cases, the ETF covers the offset lost by subsidizing the phone. Also, value is a subjective point. You cannot use it to substantiate your opinion that postpaid service is a better value. In addition, I find it insulting that you would not only label prepaid phone users as "drug dealers", but THAT YOU DID NOT PERFORM A SINGLE BIT OF RESEARCH TO VERIFY OR VALIDATE ANY OF YOUR CLAIMS.

Perhaps next time you will prepare your argument more thoroughly, although I won't hold my breath.

[fondy]

I've tried the pre-paid route before, but never month-to-month using my own phone. How does the cost of service compare? For example, month-to-month DSL rates in my area are double what they would cost if you sign a one-year contract. Is it the same for cell phone service?

[EatMoreBread]

Generally-speaking, prepaid phone prices are more expensive for the traditional phone user than the "regular" contract carriers' plans; they are generally designed for those who don't use many minutes rather than those who simply don't want a contract. However, that is changing drastically.

Virgin Mobile has good monthly phone prices that don't require contracts. Unfortunately, their handsets are lacking in many popular features and, with a few exceptions, are low in quality, too. Their coverage uses Sprint's CDMA voice network and does not support roaming, so their coverage is lighter than other carriers, but the only thing that matters is if it works in the areas you need it to.

Boost Mobile has recently seen an impressive boom from their new $50/month completely unlimited plan. The plan includes unlimited minutes, texting, mobile web, and walkie-talkie, which is an incredible deal. In fact, they've been having a few problems lately in keeping up with the deluge of customers looking to switch, many coming from traditional contract carriers. Unfortunately, as with Virgin Mobile, coverage is light as Boost Mobile uses Nextel's iDEN network, which may have the least amount of coverage nationwide (regional carriers excluded). But at less than half the cost of other carriers, it's one hell of a deal.

There are plenty of other carriers to consider, too:
-Verizon Prepaid (great Verizon coverage)
-GoPhone (great AT&T coverage)
-Kajeet (great parental controls)
-Jitterbug (phones designed for seniors)
-Helio (great phones)
-MetroPCS (cheap prices for metropolitan areas)

Look for coverage, prices on plans, features of plans like nights & weekends, text messaging, and monthly vs. pay-as-you-go plans. Also check out phone features as well as phone quality as many prepaid phones are low quality.

The only one who can determine if going prepaid makes sense is you, however, since you're the only one who can decide if the pros and cons of going prepaid make sense for you.

[slacker15]

Depends on the company. Personally, I use T-Mobile's Flex pay no contract option. This plan allows anyone with an unlocked phone (or you can pay full retail in the store) to use any of T-Mobile's calling plans or data services on a month by month basis. It is exactly the same price as a contract plan, the only difference is that you pay at the beginning of the month.

Just something to look into!

[rdunn]

ETF - Economic slavery.

[EatMoreBread]

@rdunn

Come on, you clearly have no idea what you're talking about. If you even knew what an ETF was or how it came about, you'd know that's not true. Don't spout ridiculous catch-phrases just because you think they sound cool; at least try to know what you're talking about.

[Lerianis3]

Actually, EatMoreBread, he is spot on. Most of these 'terms and fees' are economic slavery.... these companies are just waiting.... SALIVATING for you to do something that will make them be able to charge you a fee..... that is wrong, and is one of the reasons why I black out anything on a contract that I don't agree with and tell them "You don't like that.... I'll go somewhere else with my cash and recommend to all of my friends that they don't do business with you!"
They usually don't object. The one time they DID, I did exactly what I threatened to do.... they were out of business within a month!

[rdunn]

There should be a market for used/old (GSM) phones... no, they're not the latest, but you might find a deal or get a used one, then get the shortest phone/plan you want from the carrier and switch out the sim card. Let the cheap plan run out, and you're on month-to-month, usually continuing at the former plan rate.

I am -almost- about to try VoIP/wifi... using Skype, and a VoIP/wifi handset (especially at home)... paying $30/YEAR to call any cell/landline number in the US/Canada... no roam, no long distance and approx 10,000 mins/month. No, you -can't- use it for -emergency-/911 calls... but your old cellphone, even withOUT any service whatsoever, will still call emergency services... that is mandated by the FCC.
I've read rants about some of the VoIP/wifi portable handsets' quality/battery life (which should only improve), but I'm still interested in trying them with wifi 'hotspots'... and for $8/mo, Boingo supposedly gives you access to -thousands- of free and 'pay' hotspots, without having to pay extra to the hotspot... as Boingo already has agreements with them. I'd like see a large shift to Boingo/Skype over VoIP/wifi... and cancellation of cellplans, keeping our old cells (charged up) for emergency services calls... just to spite the carriers into dropping ETF's and prices.
Don't give me flack about how are providers going to stay in business, for our dead-plan cell access to emergency services... without any customers. When cell providers abandon ETF's, they'll blunt the whole point... and retain their customers. Until then, I'm about to drop their squeeze-the-consumer-dry B.S.
I'm tempted to try an iPod Touch with Skype/Boingo for my main phone. Imagine $8/mo +$30/year for no-roam/no-long-distance US/Canada phone service via wifi. That's less than $11/mo... for what they call "unlimited" use (not truly unlimited, there's a practical cap of 10,000 mins/month)... convenient if you're in a wifi-happy area.

[rdunn]

I have used Skype for a while now on computer... it works great and better quality then my cell. My cell carrier has $20/month ETF... I finally have less than a year to go, so now it's just under $200 ETF. I don't have a landline, just voicemail... I don't use my cell much at home, unless someone calls that number. I'd get a Skype-IN number for people to call, IF Skype had one close to me, like in the same area code... unfortunately they don't yet. Otherwise, Skype works -very- well.

[dodgerdog27]

Oh my gosh... why is this still a debate? How stupid are people? What!... Do you really honestly believe that a device that can work in just about any country in the world... can take pictures, videos, play mp3's, make calls, text message, access the internet, provide GPS AND somehow make you look cool and hip is only worth $49.99? What do you think... they grow on magic fairy trees in Norway and Japan? If you don't want to do a contract... pay full price, if you can't afford it then I don't know take out a 3rd mortgage! The reason they charge you the ETF is because they take an upfront hit on the device. "But they should prorate." No, they should never have prorated anything! Do you think money loses value at 3-5% a month! Of course not why should the etf loose value that fast. If you are willing to pay $1,000 for a tv, $500 for a laptop why not $300 for a cell phone... I bet you use it more than the other two combined. And for the knucklehead who said obama/pelosi will fix it... please, what do you want...everyone to use the same Nokia phone from 3 years ago? Because that's all you're going to get for $50. Oh and the last time I checked Verizon and AT&T didn't take a 30 nillion dollar handout. Knibb High Football rules!

[Lerianis3]

Yes, it is only worth 49.99. You know how much the iPhone costs to make.... get ready for your heart attack.... 20 bucks! And no, I'm not fibbing! CNet themselves posted that a couple of months ago. If the 'most complex and versitile' phone on the market only costs 20 dollars to make in parts and labor...... how much do you think a little Verizon phone costs? Not much!

[aphoog]

@Lerianis3
It does not matter what the manufacturing cost of a phone is.... what matters is the perceived value of the phone....... and I am not sure the $20 figure for an iphone includes the R&D..... so a company is well within it's right to charge you $400 for the phone... it's also about supply and demand .... a customer also has the right to not buy the $400 phone.... then the price will drop... until then do as dodgerdog27 says - Get a 3rd mortgage!!