Most Americans are in cell phone jail

Terminating early termination fees
Bottom line: Firing your cell phone company will cost you $150-$200, at least.  A family of four that wants to cancel service can pay $800 to do so. 

The argument you will hear incessantly from mobile phone providers is this: Consumers pay far below cost to buy their cell phones because the price is subsidized by carriers and the termination fees are merely a means to recover some of that subsidy for consumers who bail early.  Callers should be happy they can buy a cheap phone, and accept the consequences if they quit early. 

Of course, if that were true, the cancellation fee wouldn’t be the same for consumers who quit after three months as it is for consumers who quit after 19 months.  Verizon Wireless conceded this point in 2006 when it announced it would begin pro-rating early termination fees. Unfortunately, other carriers didn’t follow suit.

Consumers who don’t want to pay early termination fees do have options.  They can use pre-paid, disposable cell phones, a small but growing part of the industry that doesn’t require contracts with termination fees.  Or they can pay full retail price for the phone upfront.  They can try to pawn their phone and plan off on someone else (cell phone contracts allow transfers at places like CellTradeUSA.com).  Or they can throw themselves on the mercy of a customer service representative.   Having a good story to tell apparently helps.  Internet Web sites are abuzz with hints on how to get a firm to waive the fee.  The most common recommendation is to use a firm’s coverage map to find a zip code that isn’t covered, then call and claim to have moved there.  Results to that one seem to be mixed; many providers require proof of address.

Another popular tip is to become an expensive customer.  Start making calls outside of your cell phone firm’s coverage area, which will force your provider to pay for time on another provider’s network (we’re assuming here that you don’t pay roaming charges). After a few months, you’ll likely receive a polite letter strongly inviting you to find another cell phone company.

Once in a while, cell phone companies themselves open up a window of opportunity for early cancellation.  In 2006, when most carriers upped their text message prices, they had to send new agreements to users. Some consumers used these as an opportunity to decline the agreement and attempt to void their current contract. Because a change in terms could be interpreted as a change in the contract, the change constitutes a termination of the original pact, the argument suggests.  Cell phone firms fought back, but often relented, when consumers used this tactic. 

A popular myth holds that lack of adequate service — a poor signal at home, for example — is enough to void your cell phone contract.  This might seem crazed (doesn’t the contract imply that the cell phone provider is bound to provide you with cell phone service for two years?), but that’s not true.  Service quality is not part of the contract.  Poor service gives consumers no right to cancel. 

Dying, however, seems to work.  Carriers will release you from your contract when you reach the great beyond. Only a few carriers require copies of death certificates to prove you’re dead. Others will take your word for it.

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