It’s called lock-in, folks: The tactic that works by ensuring that once you sign on with a product or a company, you have virtually no way to escape. You’re stuck for life. Apple does this with the iPod by locking iTunes to its music player. Online e-mail providers do this regularly by making it impossible to get your email out of their system and onto another.
But perhaps the most notorious example of electronics lock-in is the good-old cell phone contract early termination fee. Every carrier has one: If you want to get out of your contract early, you’ll pay at least a hundred bucks for the privilege. The carriers justify it by saying you get a better deal on your cell phone when you make the initial purchase, but for many, hanging on to a crummy phone for two years just isn’t worth it, and many people find that after the first year has passed, they want out of the deal (usually so they can get an iPhone).
And that termination fee is always painful.
Well, if you sign up for new service with Verizon beginning November 15 or later, that early termination fee is about to start hurting much worse. According to Boy Genius Report, Verizon is preparing to double its ETF to a whopping $350 if you cancel your service before your contract is up. For users with a simple calling plan, that amount of money can be close to the fees for a year’s worth of service.
Oh, there’s a little bone thrown in there for you: For every month of your contract fulfilled, the company knocks $10 off the ETF. Great deal? Hardly: Cancel your 24-month contract in the 23rd month and you’re still on the hook for a $120 termination fee. Ouch.
It’s unclear if the new fee will apply to all devices or just mysterious “advanced” ones (see the link for further speculation), but either way this is a bad omen for all cell phone users, as all the carriers tend to raise prices and fees in lockstep with each other whenever they think they can get away with it. (See also: Text messaging fees.) And they usually do.
Get ready for some outrage, folks. Be mad!
{Tech.Yahoo.com/Noam Amdurski-Matzav.com Newscenter}
There are ways around this. There are websites that match up people looking to get out of a contract midway, and those looking for shorter term contracts. Most companies will allow someone else to take over the remainder of your contract without the fees.
Just read what you sign before you put your name down there!!
Just get a prepaid phone; they are much cheaper!
I’m A Verizon Customer I just renewed my plan, I wanted to get less minutes so my bill would be lower but the rep on the phone tells me that keeping my 2100 minutes on my old plan would be cheaper then getting a 1400 minute plan. That plan is no longer available but since I had they have to re new it if I want.
You would think as time go’s on shouldn’t phone service get cheaper but well seems like it geting more expensive.
Cellswapper is run by some frum yiden and has been around for a couple years. They seem to really help a lot of people avoid early termination fees and have been written about in the NY Times, Time magazine etc.