Verizon Wireless finds soul, wants to prorate early termination fees

We tend to give our wireless carriers a pretty tough time around here, but not without just cause. Case in point: early exit fees. It's semi-understandable to charge the $150 to $200 contract termination fee when folks cancel near the beginning of their two-year contracts, however, that's a bit steep if you cancel say, 18 to 23 3/4 months in. Verizon Wireless, however, has gone on record with plans to prorate early termination fees starting this fall. If so, they would be the first major US carrier to lesson exit fees on departing customers the closer they got to the end of their contract. That's certainly a nod in the direction of consumer satisfaction and welcome news for us early adoptin' nomads with an innate fear of committal. Sure, regulators must still "review the details" but the FCC chairman, Kevin Martin, already seems stoked by the benefit to customers in what "could signal a new trend among wireless carriers." We'll just have to sit tight for now and hope these dominos begin a rapid, and timely tumble.

[PARO @ Jun 29th 2006 9:35AM]

I received an email on 6/29/06 detailing the "new" contract. The text was centered on the page making it very difficult to read.

One of the clauses required that I pay any and all charges - even if they were disputed. That is very problematice what with cloning of cellphone ESNs, stolen phones, etc.

I'll have to do some work to actually "see" and read the "new" agreement and then compare it to the old.

[Joe @ Jun 29th 2006 9:36AM]

I don't think Verizon is the first wireless carrier to do this. I had service with Cingular for almost the entire contract and when I moved to a new location I couldn't get a signal. I cancelled the contract with Cingular and was only charged $75. There was approximately 3 months left on the contract.

[gorkon @ Jun 29th 2006 9:37AM]

No, they have not found a soul. They just woke up to REALITY! If they start offering this and others start doing sell as well (Cingular?? Tmobile??) then there might be more people moving between providers which means more business.

No, if they had truly found thier soul, they would have reduced the price of thier EVDO service. They market it as unlimited, yet you can;t use it for your home network via Junction Box.

[Nick @ Jun 29th 2006 9:52AM]

Not to be snide, but I think you guys need a "lessen" on homonyms. This isn't Playboy; people are reading the articles! I doubt they found "there" "soles", trickery is a very high margin business, why would they get out of it?

Don’t you love it when someone says “Not to be x” “than” they go ahead and act that way anyway?

[Daniel @ Jun 29th 2006 9:54AM]

I think Cingular Prorates their early termination charges also.

[mickaloo @ Jun 29th 2006 10:02AM]

To confirm, yes, Cingular does prorate.

[ben @ Jun 29th 2006 10:10AM]

Actually, Cingular recently STOPPED prorating their termination fees. They used to just charge $10 for every month remaining on your contract. Now it's $175 flat.

[Adam B. @ Jun 29th 2006 10:11AM]

US Cellular used to prorate, but not for the past 3 years or so.

[Alex @ Jun 29th 2006 10:13AM]

I don't see what the big deal is here. They don't say HOW they are going to prorate the termination fees, or by how much. In a way, they already do, since if I have a $40 and try to end 3 months earlier, I can cancel my contract for $120 if I just pay the final 3 months. Now if they prorated over the entire period, THEN I could see it being a big deal. 3 months left on 1 year contract? 1/4 the fee ($45).

Also I can see that if people have a $150/mo contract, they would always have to pay the early termination fee.

At least engadget readers should be following this advice: NEVER get a 2 year plan. With the speed of phones coming out, you will regret it. You usually save under $50 up front, but pay for it when they release a cool new technology or phone that you want down the line. 2 year contracts are a total sucker's bet.

[Ryan @ Jun 29th 2006 10:23AM]

Guys, here is the link to a different article, it has more information and tells you that they will charge a flat $50

http://www.msnbc.msn.com/id/13600607/

[dc @ Jun 29th 2006 11:03AM]

Notice that this wonderful proration is only available to NEW customers...with a monthly plan of $50 or more...who have had the service at least a year. How generous. If you're an existing customer, too bad.

Yet another reason I stick to prepaid. No commitment. No fees. No BS.

[David @ Jun 29th 2006 11:05AM]

To Alex -

Even with NE2, you can usually get the NE2 price after the first year. I have done this three times.

[teo @ Jun 29th 2006 11:10AM]

I'll believe it when I see it. After 6 years with Verizon, we moved out of area. It took 6 months, 8 customer support personnell and countless calls, emails and faxes to get our early term. fees reduced. They even sent me to collections!! The last cust service rep we talked to said,
"Why are you calling here? we have a department for that, it's called e-z-move. They handle all the termination fees and out of network customers. I don't know why no one ever told you."
No one told me because Verizon's billing sucks. The only complaint I ever had with Verizon was their billing department who routinely messed up on overages or changes to my plan.

[Will @ Jun 29th 2006 11:15AM]

I haven't read the fine print of this, so I don't know how useful it will be to consumers. However, this could be a sign that Verizon is not gaining, (or retaining) as many customers as they have in the past.

We all know that VZW will charge for anything and everything, so having them do something to benefit the consumer may be a sign that they feel they need more incentives to keep customers. Ironiclly to entice customers they are proposing a way to make it easier to leave.

Lower your data prices and you have a customer for life! Can you hear that Verizon!!!!!

[3DC @ Jun 29th 2006 11:15AM]

A lesson on Pro-rata factors. 12mths = 365days, total time you were on the contract if wanted to cancel 3mths early 9mths = 273. How Verizon and anyone else is more then likely calculate this. 365-273 = 92 this is the total days remaining on your contract. 92/365 = .2520 this is your Pro-Rata factor. Now multiply your 120 dollar early cancellation fee by this factor. You get $30.24. So you were ten dollars off, would you want them getting that ten dollars instead of you? I didn't think so. Sure its a big deal because that means that the only time you get charged the 120.00 is if you cancel the same day you open the account. Any length of time after this your cancellation fee will decrease each day.

This is of course unless these companies write the agreement up to where you can not cancel withing the first 3months then you would be subject to a Short Rate Factor.

[Emile @ Jun 29th 2006 11:16AM]

Just so you realize, every time they change the user agreement you actually have up to 30 days to cancel your contract if you don't agree with the changes. Now you can terminate for absolutely free.

If you want to leave, take advantage and jump on it now!

[Smittie @ Jun 29th 2006 11:18AM]

If Verizon were to prorate their exit fine today, I'd be off of Verizon already. I cannot wait to leave this company.

I paid $300 for a Motorola v710 in order to get BlueTooth only to discover that the most useful parts of BlueTooth had been disabled by Verizon. Did Verizon tell us this at the front end. Nope. When I called customer support about the fact that the v710 would not connect to my computer Verizon's customer support told me that a software update would be coming to fix that. "Just hang on."

I'm sure you've all read way more than you have wanted to about the issue. I'll be very glad to leave Verizon as soon as I can do so without paying them a fortune.

Verizon SUCKS!

Smittie

[Quake97 @ Jun 29th 2006 11:22AM]

Some states require prorating the ETF. I think Florida is one of them. I think this is very good news from Verizon Wireless, since they're usually the biggest pain in the arse. I hope this goes around and everyone does it. Like the article said, it will really help out the early adopter types, like me.

[Scott @ Jun 29th 2006 11:25AM]

{Verizon} Please hold while we look up your account...click...(key office space music)..damn it feels good to be a ganster...

{you} ?????
NEVER sign up for a 2 year commitment!!

[cory @ Jun 29th 2006 11:36AM]

Alex, while I do agree that most 2 year plans suck, at costco, they allow you to exchange your phone at any time. i.e. you get an sk2, and the sk3 comes out, you can just switch.

[nycnigel @ Jun 29th 2006 12:06PM]

I wish carriers would have plans that are for people that already own or buy phones purchased at retail price not contracted prices.

[Edward Klein @ Jun 29th 2006 1:29PM]

Never sign up for a 2 year contract? You guys are nuts! The only reason I changed phones as often as every two years now is becuase of the NE2 discount. We're talking about PHONES here. Two years just isn't all that long to hang on to one.

[Steve @ Jun 29th 2006 2:23PM]

It makes me laugh that this is just happening now in the US. I have Rogers in Canada and it has been pro rated since before I originally got a phone some 4 years ago now. $20/month remaining on contract to a max of $200. Oh and you gotta love how we're getting some phones before Cingular (W810, V3i among others) now

[Ahab @ Jun 30th 2006 12:41AM]

Not that it matters...

http://www.insidebayarea.com/ci_3931048?source=rss

...there's a class suit about to be going on in California challenging the idea of termination fees altogether. Where do you think this pressure is coming from?

[Jon @ Jun 30th 2006 2:40AM]

Maybe I'll go back to Verizon this fall... I wasn't too fond of the $350 I paid for my early exit from two two-year contracts with less than three months left.

[David Gurney @ Jul 6th 2006 9:17PM]

WTF is NE2?

[Kyle @ Dec 20th 2007 11:29AM]

If Verizon had a soul, they would enable this for current customers also. But we are grandfathered-in to a bad policy. Adding new features, and not giving them to your current customers - that is soulless.