Inside Canada's $4-billion pet industryThe two-year contract. It is the bane of a cellphone owner’s existence, especially one who must have the latest hot phone at a discounted price.
Two years is a long time, and few other marketers can get away with demanding it, much less adding to it. Every time you walk back into the cellphone store or call the customer service operators, it seems, the contract is extended. Lose the phone or ask for a replacement, and the contract is extended. Sign up for a family plan, same thing.
But try getting out of a contract early? You can do it, but you will have to pay an early termination fee of as much as $240.
Cellphone companies do not make it easy to break two-year contracts. But it can be done through shrewd negotiating or by turning to the innovators on the Internet who match contract sellers with people who want to assume the contract.
Early termination fees are intended to compensate phone companies for the discount they gave on the phone upfront. Most mobile phone companies charge the full fee no matter when the contract is scheduled to expire. Verizon Wireless recently decided to prorate the fee, and some of the other companies do that in certain cities.
The companies will waive the early termination fee if you die. Pretending to be dead, however, does not work well as a way to break a contract. Sprint Nextel, Verizon and Cingular, for example, may ask for a death certificate. T-Mobile says it does not. “They want to take people at their word,” said Graham Crow, a spokesman for the company.
Joining the military can sometimes work to break a contract if you are going to be stationed overseas. Sometimes, though, the company will suspend the service for the duration of active duty, which is not a great deal. Upon returning home, you would still be stuck with the remaining period of the contract and a much older phone. Buying a new phone would only extend the contract further.
Next to death, moving to a place where your phone company does not have service may not seem so draconian. Each company provides maps on its Web site or at its stores that show the general service area, so you can easily figure that out. But companies will ask for proof of the new address. The T-Mobile spokesman warns that it has to be a legitimate address, and post office boxes will not work.
There is an intriguing escape clause in contracts with phone companies that offer “roaming” services, though it is intended to give the carrier a way out. When a cellphone is used outside the provider’s network, calls are routed through another company’s network. The consumer pays a monthly fee for this service, which the carrier uses to pay the other phone companies to handle those calls.
Roam too much and your phone company starts losing money. Find a place where your phone goes into roaming mode and make at least half your calls from there. Every carrier said they would cancel the contract, though it might take them a month or two to notice.
A more practical approach has been bandied about on a number of blogs since October, when many carriers raised the price of text messaging. They pointed out a clause in contracts that says if changes adversely affect your rates or service, the consumer has the right to end the contract early without paying a penalty.
It was not that easy. Some companies, like Cingular, now AT&T, refused to budge, according to its spokesman. Sprint was more accommodating, though a spokeswoman said Sprint approached early termination requests on case by case. That means the consumer has to argue with customer service.
Sprint says a customer will be released from a contract if a price change has a “material adverse effect” on the customer. In other words, prices have to go up, not down. The customer has to be actually using the service in which the price changed. How much they are using it is the critical factor. The spokeswoman said Sprint’s “customer care representatives” have guidelines, but she was not going to reveal them.
Though the contract says customers have 30 days after a price change to get out of the contract, Sprint may be more generous. “They can always call customer care and see if there is a way to reconcile,” said Emmy Anderson, the Sprint spokeswoman.
Liza Tremblay, a 26-year-old owner of Bay Burger in Sag Harbor, N.Y., gave it a shot to get out of her contract with Verizon and avoid paying $175. (She wanted to use Cingular because colleagues told her the reception was better.) She followed a script she found on Consumerist.com. “I used a lot of big words, and I think I got across the idea that I meant business,” she said.
But then the Verizon service representative threw her a curve ball. They wanted her to fax her contract so they could see the clause she was referring to. She dug through her papers and found an old one — she had been with Verizon almost 10 years — and after a few more transfers to call center supervisors, they let her out. “Obviously, they had a copy of the contract,” Ms. Tremblay said.
More often than not, the company will steer the customer into a new calling plan rather than breaking the contract. “Typically, a customer calling up is not dissatisfied with the service, they are dissatisfied with their plan,” said Brenda Rainey, a Verizon spokeswoman. Nonetheless, she said, Verizon demands to see that a price increase has a significant impact on the consumer. “We are going to look at usage patterns to see if it is material,” she said.
In other words, after a lot of machination and arguing, you may not win in the end.
The solution might be, as it so often is these days, in the power of the Internet. All of the companies allow a contract to be signed over to someone else. So a number of entrepreneurs have created a new online business in trading those contracts. The best known are Celltradeusa.com and Cellswapper.com. For a fee, $20 at Celltradeusa and $15 at Cellswapper, these companies will match a contract holder to a buyer. The contract buyers pay no fee, providing them a way to save on a phone and on activation fees.
The sites have search engines so you can find a plan length, minutes and price that you like. Once the match is made, the cellphone company arranges the transfer.
The risk is that you may not find a buyer; Cellswapper, however, does not charge a fee until a match is made. Adam Korbl, the chief executive of Cellswapper, said his service makes about 100 matches a week and currently has 350 plans listed.
Be careful if you want to keep your phone number when you trade your account, which you are allowed to do. Some of the phone companies use this as a pressure point for keeping you on board, so make sure you arrange with the carrier to keep the number before you transfer the contract.
Derek C. F. Pegritz, an English composition instructor at Waynesburg College in western Pennsylvania, wants to switch cellphone carriers because of dropped calls, but he isn’t sure how he’ll do it.
“I’m shelling out $90 a month for a phone that basically sits there and collects dust,” he said.
But getting out of his contract will cost him $170. Mr. Pegritz has tried to explore other ways to be released from the remaining year of his contract, but the best he hopes for is a compromise by Cellular One. “I’m looking forward to that about as much as I’m looking forward to getting several teeth pulled next week,” he said.
FOLLOW-UP TIP: A reader recently suggested a handy tool for bypassing automated call routing at call centers. Get Human (www.gethuman.com/us/) is a database of call center numbers and the secret codes needed to get to a human.
A list of useful cellphone company numbers can be found at
http://consumersadvocate.wordpress.com/2007/02/19/cell-phone-company-phone-numbers/
Nineteen Minutes: A novel by Jodi PicoultHow To Make Money Flipping WebsitesNew Horizons in 2007Labels: call, cell phone, Mobile
