Who Hijacked Our Country

Friday, June 29, 2007

Penalty Fee for Terminating Your Cell Phone Contract Early

This seems to be getting more common, people being charged a fine for terminating their cell phone contract. And now some telecom companies are sticking it to their internet subscribers too.

I have no idea whether these fees are collectible or enforceable. After all, if you’ve ended your dealings with a telecom company, what are they gonna do, disconnect you? And what kind of “free enterprise” is this anyway, penalizing a customer for patronizing a competitor? What's next, Safeway fining their customers if they catch them shopping at Albertsons?

There's a reason I’m interested in this. About 2-½ years ago we terminated our 2-year contract with a cell phone company — after two months. We had just moved and we wanted to have cell phones at least until we could get a conventional land line set up. Neither of us had ever had a cell phone before.

We went to a kiosk at Wal-Mart and told the sales rep that we needed cell phone service for just a month or two while we were getting settled in. He said “sure, I can get you started.” The whole thing took just a few minutes and I signed the forms and we got our phones.

I didn’t realize I had signed a 2-year contract that called for a $300 fine if I ended the contract early. Yes, I should have taken a few minutes to pore over all the fine print, even though we were in a hurry and there were people waiting in line behind us. Yes, I should've been more careful and not allowed us to get suckered.

After two months we were disgusted by the shitty phone service, and the fees turned out to be much higher than the slick salesman at Wal-Mart had told us. So we called them up to cancel. That’s when we were told about the $300 cancellation fee ($150 for each phone). And that’s when we decided not to pay this ridiculous extortion fee. What are those fuckheads gonna do about it?

And we still haven’t paid it. We've gotten lots of threatening letters — first from the cell phone carrier and then from various collection agencies. This would go in our credit report, etc. (So far it hasn’t.)

I recently did a web search on “cell phone contract termination.” Lots of websites; lots of forums on this exact subject. There were lots of suggestions on how to try wiggling out of your contract and how to persuade the cell phone carrier to terminate the contract. But I never saw anyone just say "don't pay it." Have I started something? I’m baaad!

Has anything like this happened to you?


Blogger Larry said...

I have never cancelled one but I think it sucks. Why should you be penalized if you want away from their shoddy service.

June 30, 2007 at 5:01 AM  
Blogger Tom Harper said...

Larry: This is the only time I've flat-out refused to pay a bill. I've disputed phone bills before, where you call and tell them that you didn't make a call that mistakenly appeared on your bill; they've always been cooperative in those cases. But in this case there was no response to our written responses. It was like talking to a wall. So I finally just said the hell with it.

June 30, 2007 at 10:48 AM  
Blogger LET'S TALK said...

I've had some bad experience with these companies and made up my mind not to deal with certain ones that I know is just a rip off.

I don't like to leave any bills that I've made, but these guys try to steal from you as if you are some 1st grader.

June 30, 2007 at 12:11 PM  
Blogger Tom Harper said...

Let's Talk: Yeah, some companies are just plain crooks. Technically I'm wrong in this dispute, but ethically and morally I think I'm right. In any case they'll never see one penny of that $300.

June 30, 2007 at 1:46 PM  
Blogger Leo said...

The cell phone carriers are all evil! They charge you a fortune in hidden fees and taxes and try to rape you again if you attempt to leave their carrier. I've always thought that there should be more regulations to control this industry. Good post!

June 30, 2007 at 5:24 PM  
Blogger Tom Harper said...

Leo: Thanks. These telecom companies are too big and powerful for Congress to regulate them. If anything, it's the other way around; they're telling Congress what to do. But as far as these penalty fees are concerned, I don't they have any legal power behind them.

June 30, 2007 at 5:53 PM  
Blogger libhom said...

One important lesson:

Never Shop at Wal-Mart!

July 4, 2007 at 8:26 AM  
Blogger Tom Harper said...

Libhom: Yes, very important lesson. I can't say I never darken their doorway, but it's a very rare occurrence.

July 4, 2007 at 10:16 AM  
Blogger Gluck said...

Obviously everyone here is ignoring a very important fact. When one gets a new cell phone for free, $50 or $100s that device is subsidised to win your new buiness. That subsidy is built into the expectation of the customer remaining a customer for the 2 years or what ever. That is the origin of the fee. If you do not stay a customer for the full two years the company wants the money it gave you up front....nobody is being a crook or getting ripped off...

July 1, 2008 at 1:04 PM  

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