5 Ways to Avoid Early Termination Fees

Most cell phone carriers want to keep you in a relationship with them as long as possible. And they don’t take kindly to your desire to end your contract and jump to another carrier.

Most of the time, cell phone plans have worked like this: You got a big discount on your phone — say, you only paid $200 for a phone worth $650 — if you agreed to stay with the carrier for two years. But, that meant you were paying off the rest of the cost of your phone as part of your monthly service bill.

So if you left before the two-year contract was up, you were sticking your carrier with the rest of the bill for your phone. Carriers have tried to discourage this by charging early termination fees (ETF) of up to $300 per line to customers who left early. However, you don’t need to be held hostage by the threat of an ETF. Here are some tactics to find a new carrier without losing a ton of money.

1. Calculate the Cost of Leaving

If you are currently in a cell phone contract, you should weigh the potential cost savings of switching with any early termination fees you might be forced to pay. In most cases, paying a $300 ETF to get into a high-savings plan that costs $75 less per month will not only allow you to break even in 4 months but will start saving you much more over the course of a year.

2.  Find Out if Your Contract Has Changed Terms

If your cell carrier changes the terms of your contract, you may be able to cancel your contract without paying any early termination fees. Many states require cell phone companies to give customers advance notice of contract changes that could increase the cost or extend the length of the contract Cell providers are required to notify you of these changes to their contract terms, but they are often buried in small print within your bill.

So, before you pay a fee, make sure to read the fine print to see if any changes have been made since you signed your contract. If changes have been made, the carrier will most likely waive your ETF.

3 . Transfer Your Contract to Someone Else

This tactic requires that you know someone who wants to assume your contract – but it can be done. The process is free, easy, and can be done over the phone in 20 minutes if both people are there together.

Here’s how it works: Call your carrier and ask to do an Assumption of Liability – this process legally transfers the remaining terms on the contract to another person. Your provider’s customer service representative will send a copy of the contract terms and the other person has to read over these and verify they have read them. From there the rep asks the person assuming the contract a few questions, verifies their SSN and some other information, and completes the deal. The minutes and bill are prorated between the two individuals. Keep in mind, your bill has to be current and the other person must be at least 18 years of age or older. There will also be a credit check run for the person assuming the contract.

4. Complain Often and Politely

If you have spotty service, dropped calls, or your calls repeatedly go straight to voicemail, most folks will complain to the company. But, the trick is to do it the right way. When you call customer service, you must be polite and professional, thoroughly explain the situation to them, and be patient. If this is a recurring problem, it’s a good time to ask to get out of your contract – and you may have to ask to speak to a manager. This tactic works best if you call often and keep records.

If you don’t get anywhere, you may have to file a complaint with the Better Business Bureau or the Federal Trade Commission. Sometimes just mentioning the BBB or FTC may be enough to get you what you want – out of your contract.

If all else fails…


5. Move Out of the Service Area

Most providers have coverage areas that are quite extensive, but depending on where you live, there will always be some issues with service. If you move to an area with little or no coverage, you may be able to get out of your contract. Remember that most cellular service providers don’t want to let you go, so they may offer you a mini antenna or tower that is designed to boost your signal enough to give you reasonable coverage in your home. These may or may not work – so be prepared to Use Tactic 4 (“Complain Often and Politely”) if you really want to switch carriers.

If you want to change carriers, don’t pay the Early Termination Fee unless you absolutely have to. You can transfer your phone; look for a loophole in your contract; or ask politely if you move out of the service range. Or, you can just decide to eat the cost if you find a carrier (like Republic) that offers high savings to help you defray the cost of your ETF within a few months. The choice  — and the power to save – is in your hands.

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One thought on “5 Ways to Avoid Early Termination Fees”

  1. Regarding the change in contract terms, point 2 above, I am happy to see that you suggested this.

    It is my understanding of contract law that unilateral changes made by a party since the bilateral agreement was made (the original phone contract), nulifies the terms of the contract unless the other party agrees to the new terms of the revised contract.

    I had tried it previously, but the problem was that the representatives of the phone company, their management, and their legal department, no one understood how contract law worked. Well, they would not admit or act like they agreed, but provided somewhat of a canned answer in a letter. I basically disagreed with their response and decision, and I appealed in writing. I eventually caved and paid the early termination fee, as this was probably their strategy. It was not worth my time and effort to continue fighting a battle over $100 or $200.

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