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How to Get Out of Your Cell Phone Contract – Without an Early Termination Fee
Feel locked into your cell phone contract because of the early termination fee?
Cell phone carriers impose hefty early termination fees for a reason.
A report by the U.S. Public Interest Research Group (U.S. PIRG), found that termination fees allow cell phone companies to continue providing substandard service to their customers because those customers can’t cancel their contracts without paying large fees.
While this is true, there are a few loopholes in your carrier’s service contract that will allow you to terminate your relationship with your cell phone service provider, without a penalty:
The Material Adverse Clause – this little known snippet in your cell phone agreement states that, “should any terms or conditions change after signing the Agreement for Service, you have a right to terminate the service without penalty”.
Wording in each carriers’ service agreement varies, but essentially states the same thing.
Some of the recent changes that have allowed users to end the relationship with their carrier include; an increase in the charge for text messaging by all four major wireless carriers, and Verizon’s increase on administration charges.
When a carrier makes any changes to the contract, you are given 14 to 60 days to terminate the service, depending on the carrier. Continuing to use the service beyond the given time frame indicates that you’re agreeing to the changes. This is known in the wireless industry as a negative option.
What To Do
- Carriers notify customers of changes made to their cellular contract via U.S mail, so make sure you read any correspondence from them. Most carriers provide information on the amount of time allowed to exit the contract, but some do not – and they’re not legally obligated to do so. If you’re uncertain on the amount of time you have, find the information online or call your carrier’s customer service.
- Make certain that the changes in the contract pertain to you. For instance, the recent text message increase did not affect subscribers who purchased unlimited text messaging – only subscribers who used the service occasionally.
- Ask to speak to a supervisor right away. Most customer service representatives don’t have the authority to terminate your service. Make sure you specifically state to the supervisor that you wish to terminate under the Adverse Material Clause, and explain how changes in the contract have affected you.
Cell phone companies don’t enforce material adverse clauses uniformly. In fact, it’s often up to the discretion of a customer support supervisor whether you have an honest gripe or not.
Also, wording in material adverse clauses can be confusing. For instance, T-Mobile’s clause states that you accept the changes if you continue using your service. While this should not apply to the 14 day window the carrier allows, you may want to play it safe and stop using your cell phone until your contract for service has been canceled.
Roaming occurs anytime you place or receive a call out of your carrier’s network. Not long ago, carriers offset roaming costs by charging customers 69 cents or more for each minute spent on another carrier’s network. Today, all major carriers have eliminated tariff fees associated with roaming by allowing consumers to purchase nationwide plans that offer roaming-free minutes.
Many cell phone users are unaware that there’s a cap on the amount of time one can spend roaming.
Typically, carriers start losing revenue if you roam over 750 minutes a month. They also lose money if a customer uses more than 6 gigabytes of data. The amount of roaming minutes or data you’re allowed to use varies by carrier.
What To Do
- Read your carrier’s service agreement. It will provide information on how much data and voice roaming you can use before its considered excessive.
- Find an area where your phone is roaming, and start calling or texting. If you’re cell phone plan includes free night and weekends, you may want to consider using your phone then. It’s more expensive on the carrier’s end.
Terminating service because of excessive roaming is at your carrier’s discretion. There are other options a carrier may choose, including prohibiting off-network roaming, or changing your plan to one that imposes a fee on any roaming activity.
Repeatedly Calling Customer Service
Each call placed to your carriers’ customer service center cuts into their profit. For an average wireless subscriber who spends about $53 a month on a service, carriers only pocket a profit of about $24, according to Roger Entner, senior vice president at IAG Research.
On average, it costs cell phone companies between $2 to $3 for every minute a customer is on the phone with a support staff member. This means that all of a carrier’s profit for one subscriber is depleted after only 8 to 12 minutes per month of phone calls to customer support.
What To Do
- Try to make your gripe legitimate. If you browse through your cell phone statement, you’ll often find excessive or unfamiliar charges. Ask the customer service representative to explain these charges to you.
Not all cell phone service providers terminate service due to too many calls placed to customer support staff. Carriers who have canceled service to their subscribers because of excessive calls include T-Mobile, AT&T, Sprint and Alltel.
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