How to Get Out of Your Cell Phone Contract

Written by Nickel - 20 Comments

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A few weeks ago, I ran across a nice video that gave a rundown of ways to get out of your cell phone contract without paying an early termination fee (ETF). We actually just went through this process (more below), and I’m sure that many others are in the same boat, so I thought I’d highlight it here.

Avoiding a cell phone ETF – in theory

What follows are six (possible) ways to break your cell phone contract without a penalty. Some are easier than others, but in any case you’ll probably have to work at it to convince your carrier to let you out.

Cancel within 30 days. Many carriers have a 30 day trial period during which you can cancel without an ETF.
If you have free roaming, use more than half your monthly minutes while roaming and your carrier might terminate your agreement to save money. Set your preferences to roaming only and make tons of calls using your free night and weekend minutes.
Keep an eye out for notices of service changes. You typically have the right to cancel if your provider makes a “materially adverse” change to your agreement.
If you have recurring problems with your service, call in and document the problems whenever they occur. Takes notes on your conversations and get the name and/or ID of the people you speak to. If you can document a pattern of problems, you might be able to get out of your contract.
If you have a friend that needs cell service, and is willing to take over your agreement, ask if your carrier if you can transfer your line. If you don’t know anyone who needs a new phone, search the internet for cell phone swap programs.
Move to an area without coverage (seriously?). If you can’t get reliable service at your home address, your carrier might let you out of your contract.

Avoiding a cell phone ETF – in practice

In our case, we had suffered through terrible coverage at home for a few years. We put up with it for so long because we were getting dirt cheap service through a pair of Sprint SERO plans. In the end, however, we decided to move on to greener pastures.

In looking at the Sprint coverage maps, I noticed that our house was outside of their coverage area, so I called to inquire about canceling. I was told by the phone rep that we could get out of our contract without the ETF. He said he’d notate our account and we could simply port our numbers elsewhere.

Fast forward about six weeks and we got hit with a $441 bill — two $200 ETFs plus a little over 10% in taxes. To make a long story short, I spend the better part of two weeks (and countless hours on the phone) getting this removed from our account.

We even had to go so far as providing proof of residence. Apparently the fact that we’ve been receiving (and paying) our bill at our current address for roughly three years wasn’t sufficient “proof” that we actually live here.

Lessons learned

I think the take home message here is that, no matter how strong your case, you need to be prepared to fight with your carrier. Take good notes whenever you call. Record the date and time of your call, the name and ID number of the rep that you speak to, and so on.

As long as you have a legitimate case, you should be alright — eventually. I do have to say that the frustration was totally worth it, though… I’m loving my iPhone, and we’re thrilled to once again be able to use our phones at home.

Source: Spend Less TV via Bargain Babe

Published on October 5th, 2009 - 20 Comments
Filed under: Miscellany
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About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

Comments (scroll down to add your own):

That was real good, I thought you just couldn’t terminate them without paying.
Comment by John DeFlumeri Jr — Oct 5th 2009 @ 6:33 am
Great list, although I am pretty sure it may be cost prohibitive to move just to get out of a cell phone contract. I haven’t heard of the roaming minutes suggestion before, I wonder if that would actually work?
Comment by Kyle — Oct 5th 2009 @ 8:22 am
Good list except for moving. Who would move just to change cell phone carriers?
Comment by EZ — Oct 5th 2009 @ 8:54 am
Thank you for this great information. This is always a problem when you are getting horrible service and still have 18 months left on your contract.

I have heard nothing but complaints about Sprint service, and would never go with them as a provider.
Comment by Ellen / Money Lounge — Oct 5th 2009 @ 9:31 am
Kyle & EZ: Definitely, but if you’re moving anyway… If you really wanted to, you could probably change your billing address as well as the mailing address for one other critical bill (like a utility bill? — needed for proof) and then try to get out.

Ellen: I’ve heard all the same complaints, but had nothing but good things to say about Sprint’s customer service until the very end.

Comment by Nickel — Oct 5th 2009 @ 9:43 am
Good list with information. I would love to hear real life experience from others who have really used and gout out from their cell phone contract.
Comment by mewithoutdebt — Oct 5th 2009 @ 10:51 am
I have att and would love to get out of their two year contract. My iphone was stolen and can’t get a new one at rebate cost and don’t like the att service so now am stuck.
Comment by Craig — Oct 5th 2009 @ 12:03 pm
(”I think the take home message here is that, no matter how strong your case, you need to be prepared to fight with your carrier.”)

The primary lesson-learned is — NOT to sign unfavorable business contracts.

It is foolish for a consumer to sign a complex contract with vague provisions & clauses that he does not understand… with a company he does not fully trust.

Deluxe Cell fones are very convenient & versatile, but certainly not a necessity to most people. There are always alternatives to onerous contracts.

When I first considered getting a cell fone, I immediately dropped the idea when I saw the complex, one-sided contracts arrogantly ‘required’ by the carriers. Fortunately, ‘Pre-Paid/Pay-as-You-Go’ soon appeared with no contract requirement at all. I’ve happily used pre-paid cell fones ever since; they are a real bargain unless you have unusual phone use needs… or absolutely can not live without an iPhone.

Also, seems a tad unethical to ‘break’ a voluntary contract to avoid an ETF… if the consumer did fully understand that ETF contract requirement. Honest contracts work both ways.
Comment by TonyD — Oct 5th 2009 @ 3:48 pm
TonyD: The contracts are not “arrogantly required.” Rather, they are a condition of getting favorable pricing on the handset. If you want to pay full freight for a phone, you can go month to month with just about any carrier. Of course, if you want a fancy phone, then you’re going to pay through the nose.

Comment by Nickel — Oct 5th 2009 @ 4:00 pm
@Nickel: “The contracts are not “arrogantly required”. Rather, they are a condition of getting favorable pricing on the handset.”

I can’t speak for all carriers, but with Verizon it’s more than just the price of the handset. They will not allow you to change your service (i.e. add a texting package, reduce minute plan, etc.) while you are month to month. They force you to re-up. This has happened to me twice, but I have never pressed the issue with them. It may be something you can get out of if you yell at the right person long enough.
Comment by kev — Oct 5th 2009 @ 4:16 pm
When my dad passed away we inquired about cancelling his phone and were told it would be no problem, we would only be charged the $200 ETF because he still had I forget how much time left on his contract. I serioulsy thought they were joking until my mom’s friend told us she went through the same thing when her husband died. My mom ended up taking over his contract and changing it to her needs when it was up but I’m thinking now we maybe should have just said he moved to an area without good coverage.
Comment by Kelli — Oct 5th 2009 @ 5:10 pm
I love my iPhone too
Comment by Eric — Oct 5th 2009 @ 8:02 pm
i close family member was overcharged and from then on i avoid those phone contracts like the bubonic plague, just like credit cards and anything else that is in the disguise of convenience but it is meant to bleed your bank account dry
Comment by kenyantykoon — Oct 6th 2009 @ 1:03 am
I tried to get out of a contract for mobile boradband with my current phone company. The costs outweighed the hassle of taking it further. This time I will cop it sweet & wait for my contract to expire. I will not use the same phone company again and will keep your advice saved for if I even come across this situation again.
Better still I will ask for all the terms and conditions to be explained to me before I sign anything in the future.
Comment by Alex Burda — Oct 6th 2009 @ 1:24 am
Just making sure that I can receive the follow up comments from this post.
Thanks
Comment by Alex Burda — Oct 6th 2009 @ 1:27 am
In a different vein, analyze how many minutes you really use and how many text messages you really send and how many times you could put off looking up something over the internet or checking your email until you got home.

Do you want to pay an extra $10 for unlimited text messages when you only send about 20 messages a month? Even at $0.2 a pop, it just comes to $4.

Then you can choose a plan that best suits your needs. If a cheaper plan fulfills most of your needs, with occasional overages that is the one you should be on or else you are paying for something you don’t use month after month.
Comment by GM — Oct 7th 2009 @ 10:55 am
@Nickel: “The contracts are not “arrogantly required.” Rather, they are a condition of getting favorable pricing on the handset. If you want to pay full freight for a phone, you can go month to month with just about any carrier.”

I can understand that the carrier might want to lock you into a contract in exchange for giving you a discounted price on a phone. They are essentially making up for the up front discount over the next several months of monthly service charges. The problem is that if you are paying month to month (for example, if you provide your own phone), you pay the exact same monthly amount for service. They should charge you less!
Comment by Chris I. — Oct 8th 2009 @ 11:22 am
Is there any way for me to get internet for my phone while at my home? I have at&t
Comment by peter — Oct 8th 2009 @ 7:40 pm
Thanks for linking to me, Nickel!!!
Comment by Bargain Babe — Oct 12th 2009 @ 2:22 pm
Generally, the reason for the ETF is the leftover cost of the phone that is included in the purchase, so consider the following two options:
1. buy the phone separately and go with a month-to-month plan. You should then be able to cancel when you want.
2. ask about a 1-year contract with a little more upfront for the phone

Upon purchase and signing up:
1. Ask how much of your bill is for the phone itself and how much is for the service before signing up. Have then write it down and sign and date it. Hold them accountable for what they are telling you.
2. Ask that the cancelation and fees portion of the contract be circled and explained to you.
3. Ask about their auto-renewal policies with/without action by you (if they have a negative-option program it means you MUST TAKE ACTION to stop the renewal)

KEEP THE CONTRACT SAFELY TUCKED AWAY FOR FUTURE USE.

Warning about family plans
Also, be aware that if you are in a ‘family’ plan there is a possibility that they may consider you a co-signer. If the originator of the contract doesn’t pay, they may come after you for the unpaid amount–not only for your portion of the bill, but theirs as well.

As a certified credit counselor, I have seen this show up on credit reports often.
Comment by Pat — Oct 13th 2009 @ 10:11 am

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