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Cellphones The Almighty Buck

Verizon Doubles Early Termination Fee and More 520

Posted by timothy
from the infuriating-design dept.
An anonymous reader writes "If you buy a smartphone through Verizon, be prepared for an increase in the early termination fee. Verizon is doubling the phone-subsidy to $350. What's more, is that Verizon also actively charges customers for accidental data transmissions of as little as 0.02kb. 'They configure the phones to have multiple easily hit keystrokes to launch 'Get it now' or 'Mobile Web'—usually a single key like an arrow key. [...] The instant you call the function, they charge you the data fee. We cancel these unintended requests as fast as we can hit the End key, but it doesn't matter; they've told me that ANY data--even one kilobyte--is billed as 1MB. The damage is done.'"
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Verizon Doubles Early Termination Fee and More

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  • Wow (Score:5, Insightful)

    by SirBigSpur (1677306) on Thursday November 12, 2009 @05:29PM (#30079290)
    I hate Verizon even more now, I didn't think it was possible.
    • Re:Wow (Score:5, Funny)

      by Zantac69 (1331461) on Thursday November 12, 2009 @05:36PM (#30079424) Journal
      Funny - I was thinking the same thing. I wish the DROID would be available, unlocked, with a SIM card. I have comtemplated going with Verizon.

      The flaw of DROID is locked to Verizon.
      The flaw of the iPhone is locked to AT&T (but at least you can jail break it).

      I guess I am sticking with my SonyEricsson w810i until the phone providers adopt the buisness model in Europe...which might be right about the time they are tossing snowballs in hell...or DukeNukem Forever is released.
      • Re:Wow (Score:4, Interesting)

        by Orange Crush (934731) on Thursday November 12, 2009 @05:42PM (#30079526)
        ^Or you can buy the Motorola Milestone from Europe or Canada. However, you may be stuck on 3G data(AT&T might be the right frequency, but I know T-mobile isn't). Maybe Google will sell some new Dev phones soon. The G1's getting long in the tooth for a developer's platform.
        • by Zantac69 (1331461)
          Thanks for the suggestion - will be in Sweden for X-mas so I might have to check it out. I can get VAT returned when I am coming back...so with that it makes it not too bad for the price.
          • Typo correction--just to clarify, you might get stuck WITHOUT 3G and relegated to 2G only. I don't recall if AT&T uses the same frequencies as Europe and Canada, but I'm certain T-mobile(USA) doesn't.
            • by Andy Dodd (701)

              AT&T uses different frequencies than Europe. Not sure about CA, I think they may use the same 3G bands as AT&T.

              The Milestone says UMTS in 900 and 2100. At best it may cover one of the two bands AT&T uses. (I always get 850 vs 900 and 1800 vs 1900 confused.)

              T-Mo uses the 1700 MHz band for UMTS, few phones support this.

            • Re:Wow (Score:4, Informative)

              by Mike Buddha (10734) on Thursday November 12, 2009 @05:59PM (#30079882)

              I don't recall if AT&T uses the same frequencies as Europe

              Nope. AT&T uses 850Mhz & 1900Mhz for 3G, Europe uses 2100Mhz. T-Mobile uses 1700Mhz (which nobody else uses) and 2100Mhz for 3G. Unfortunately, they use 1700Mhz for the uplink and 2100Mhz for downlink, making their network incompatible with Europe and Asia.

      • Re:Wow (Score:4, Informative)

        by TooMuchToDo (882796) on Thursday November 12, 2009 @06:52PM (#30080700)
        The Droid is coming to T-Mobile. Google for it. Android Guys have the article I believe.
    • Re: (Score:3, Informative)

      by AmigaMMC (1103025)
      I had Verizon for 5 years and regardless to them having the best network I dropped them for not having SIM card phones. I called customer service many times and asked for solutions but ultimately I made sure they knew that I was not going to support a company that does not support the standard SIM cards to I moved to ATT, got a Blackberry, called ATT and they unlocked it right away over the phone. I happily use it with local SIM cards when I travel around the world rather than paying Verizon astronomical fe
  • by Anita Coney (648748) on Thursday November 12, 2009 @05:32PM (#30079330) Homepage

    And yet people make fun of me for using a TracFone, for about only $9 per month.

    • by MBGMorden (803437)

      People who make a lot of calls aren't going to come in at $9 per month - pre-paids are only good for people with very low usage.

      Also, unlike most other services, with TracFone you don't own your number. You decide to switch carriers and your phone number goes with it. Personally keeping my number is worth quite a bit more than $350. To each his own though.

  • If you buy a smartphone through Verizon, be prepared for an increase in the early termination fee. Verizon is doubling the phone-subsidy to $350.

    You sign a contract with Verizon. Verizon is providing the services. You are contracting with them and saying you will use their services for X years. It's a contract. Breaking a contract is something where both parties agree what the response should be. In this case, Verizon is saying that you are charged $350 if you break your contract and stop paying them what you said you would pay them.

    Honestly, I don't see what the deal is. Chances are you are paying what... average of $100 a month for a Verizon

    • by tcc3 (958644) on Thursday November 12, 2009 @05:42PM (#30079534)

      You would be right if the contract actually worked both ways. If you have problem with your service, or a billing dispute, or any of a number of other problems, their answer is likely to be "Too bad."

      The customer is left with two choices - a very costly and unlikely to succeed lawsuit, or to walk. Taking your business elsewhere is sometimes the only effective protest against a corporate bully.

      • You would be right if the contract actually worked both ways. If you have problem with your service, or a billing dispute, or any of a number of other problems, their answer is likely to be "Too bad."

        Not really. We've have billing disputes and problems with both Verizon and AT&T. We got a discount from AT&T and refunds from Verizon. Is it difficult to actually talk to someone who knows what they are talking about and works with you? Yes. It's not impossible though, and we were not told "too bad."

        The customer is left with two choices - a very costly and unlikely to succeed lawsuit, or to walk.

        I suppose this depends on the nature of the issue. In the case of an early termination, I can't see how you have a leg to stand on in the first place. If you mean overcharges or something like tha

      • by Artraze (600366)

        How doesn't it work both ways? They give you $X as a sort of signing bonus, knowing that across two years they will make that back. Do you think it's unfair that you can't just walk away with that money the next month? Isn't it only reasonable they get back the money they gave you (prorated even, IIRC) if you don't fulfill the expectations of the contract?

        Contrary to the GP's post, the penalty is, in principle, because of the phone subsidy. Ongoing general service or support contracts rarely have severa

        • "Contrary to the GP's post, the penalty is, in principle, because of the phone subsidy."

          I think that's incorrect.

          If you get a $200 phone for $100 because of 2 year agreement, not considering interest, you think, "right, subsidy of about $4.16 per month". But yet, when you hit the 25th month, the monthly service doesn't go down by $4.16. Worse, if you bring your own phone to the carrier, they don't lower the price.

          In my opinion, you're getting a subsidy for the difference between the "normal" price and the

    • by mayko (1630637) on Thursday November 12, 2009 @05:45PM (#30079592)
      My problem would be with

      Guy/Girl: "Hey Verizon, can you block my data service so I don't accidentally use it?"

      Verizon: "Sure we can. (click)"

      Guy/Girl: "Uh, Why is my bill showing charges for data, that I have disabled?"

      Verizon: "Because silly.... we have to send you data to tell you that you can't use the data plan!"
      • Re: (Score:3, Interesting)

        by tftp (111690)
        Just for comparison: I have an AT&T phone at the moment, and I blocked the data connection when I got the phone, right at the store. Now and then I press the "connect" button accidentally, but all I get is a "Connection failed" screen, and no data charges.
      • Re: (Score:3, Informative)

        by LurkerXXX (667952)

        I had that happen. I specifically called them to have them block data service.

        The next 2 months each had data charges that I had to call them up and insist they remove the charges and enforce the block.

        Verizon sucks. I never want to use them again. They nickel and dime you worse than any other provider.

    • by EvilNTUser (573674) on Thursday November 12, 2009 @05:45PM (#30079594)

      Haven't you noticed? Nowadays we don't vote with our wallets any more, we just dash to the lowest up front cost and then start bitching when we realize we can't act like children. Then we do it again with the next company, because we now "hate" the first.

    • From the article, I think the issue with the fee is that it is not an early termination fee on your contract, any more. According to the article, on a 2 year contract it starts at $350 and goes down $10 every month. A quick bit of subtraction shows that at the end of your contract you still owe $110. You've held up your end of the contract, and still Verizon want to take more money from you. That doesn't seem right.

      (Also, the numbers Americans throw around for their cell phone contracts scare me - $100 a m

      • (Also, the numbers Americans throw around for their cell phone contracts scare me - $100 a month or more? Do they deliver your data to you in gold-plated USB sticks or something?)

        Meh. Family plan. Data plans are expensive, too, though...

      • ^They can't charge you $110 if you've fulfilled your contract. They're just making it expensive to terminate with even a single month left to go.
    • by Jthon (595383) on Thursday November 12, 2009 @05:51PM (#30079718)

      The problem for me isn't that they have ETF fees, in fact given most phones have a subsidy I under stand that. My problem is that you cannot sign a contract without an ETF even if you provide your own phone. On top of that if you buy a phone without a subsidy it's not like you can negotiate a service discount with Verizon. You pay the same amount in either case and that's not really fair.

      If Verizon actually cared about the customer they would offer a choice of the following two plan options.

      1. Subsidized phone, contract, and ETF. You pay for you phone over the life of your contract, basically you're leasing the phone.

      2. Unsubsidized phone, no contract, no ETF, discounted plan rate. You buy the phone outright since you paid full price for it you should save the difference between the price you paid and the subsidized price over the same length of time as the contract from option 1.

      In fact at one point I was going to sign up for a plan with Verizon and bring my own phone, but even if I didn't get a new phone from them to setup new service I had to agree to a 1 year contract which included an ETF. There was NO way to avoid the contract.

      This entire subsidy and ETF thing on your phone reminds me of old MA Bell. Before the original AT&T got broken up due to being a monopoly it wasn't actually possible for you to buy a telephone. You HAD to lease the phone from the phone company, and the phone company owned your phone. You basically got whatever phone Ma Bell wanted you to have. Cellphone companies are in that position now. While they say you "buy" your phone, you're really leasing it with no option to truly own it. If these companies were forced to offer a choice of phones, and didn't have these crazy contracts to hide behind I'm sure the cost of cellphone handsets would drop along through real competition.

  • by Anonymous Coward

    They'll make more now than the class-action will cost later.

  • Termination Fees (Score:4, Insightful)

    by MozeeToby (1163751) on Thursday November 12, 2009 @05:34PM (#30079384)

    I understand, on principle why they charge early termination fees. $350 for a smartphone seems extreme, but taking the new Droid for example, the phone costs $550 without a plan and the customer gets it for $200 which is right in line. What doesn't make sense is the fact that if I cancel my contract 1 year and 11 months in, I'm expected to pay the whole termination fee, despite the fact that Verizon has already made back $335 of it. That's just abussive. Termination fees should be proportional to the amount of the contract you are terminating and capped at the amount of subsidization on the phone.

  • As much as I can bash Verizon for their gestapo-like moves in other areas, at least they've given us the tools to completely disable features like these through account management online. I know this doesn't offer much of a solution for the casual user of these features, but at least it helps with certain users who intend to NEVER use the features.

    As far as purposely designing these features on phones that make it VERY easy to accidentally activate and thus get charged for it no matter how quickly you try

  • Don't want to use the data service? There's a scam for that. Want to upgrade your phone? There's a scam for that. No matter what you want to do, we'll get your money. Because there's a scam for that.

  • by DomNF15 (1529309) on Thursday November 12, 2009 @05:38PM (#30079450)
    people were using the buy one Blackberry get one free promotion, canceling service, and selling that second Blackberry at a profit. What, are you feeling bad because you didn't think of it sooner? So am I :-)
  • I bought a Droid on Friday morning when it came out online. I received it at lunch on Monday, and activated. Upon activation, they made me agree to the 2 year contract re-up, and a $175 early termination fee...
  • Free market (Score:2, Insightful)

    If you don't like the termination fee then you should simply use a competing service. Your choice to use Verizon is voluntary. Eventually the market will dictate what Verizon can charge.
    • Re: (Score:2, Interesting)

      by jpcarter (1098791)
      Until the competing services raise their fees to match Verizon.
    • Re: (Score:3, Insightful)

      by Evro (18923) *

      Hopefully this is a joke. A free market is a nice idea, as is using a competing service, but what do you do when there are only 4 or 5 players in the market, and they all charge an early termination fee? It's collusion.

  • by tommy (12973) on Thursday November 12, 2009 @05:52PM (#30079734) Homepage

    Using the DROID as an example:

    The DROID with no contract is $560.

    Math with the current termination fee:
    $200 for the phone +
    $175 to immediately break your contract =
    $375 (You save $185 over the no-contract price)

    Math with the new termination fee:
    $200 for the phone +
    $350 to immediately break your contract =
    $550 (You save $10 over the no-contract price)

    Either way you save more than simply buying the phone without a contract. The new fee is high, but I can understand their reasoning.

    • by rocketPack (1255456) on Thursday November 12, 2009 @06:41PM (#30080552)
      yeah, I actually built a business model on this concept:

      1. Purchased DROID w/ contract
      2. Break contract, keep phone at $185 net profit
      3. Sell phone on eBay
      4. New user of phone activates phone on Verizon (because they have no choice of carrier when they buy the DROID) and pay Verizon a bunch of money that I wasn't going to pay
      5. New user changes their mind, sells the phone on eBay, and new-new user runs off to sign up with Verizon

      Ha! Ha! Ha! I really screwed Verizon over!!

      Hey, wait...


      Point is, no matter how much Verizon sells a phone for, that phone can only do one of two things: be used to make Verizon money, or go in the trash. Is it justifiable for a CARRIER-LOCKED PHONE to be contractually *fully* subsidized by the purchaser? If this was AT&T, T-Mobile, etc. I could see the point - I take my phone and run, screwing the company out of money. But with Verizon's phones, regardless of how long I am with them - the phone will keep making them money!

  • if you have a smartphone on verizon you are REQUIRED to have a smartphone data plan which is "unlimited" (5GB/month), so no 1MB billings.

    i know. I have an Omnia on Verizon /employer discounts ftw

  • At least with Sprint, if they change your terms of service, you have a set period of time to cancel your contract with them without an early termination fee. As already stated, you and the company have a contract. The company has changed their contract with you while the contract was still in effect. So, you have the ability to cancel w/o any type of fee if you do not agree with the unilateral changes that they made to your TOS. If you agree with the new TOS (or simply don't know that they changed), the
  • ORLY? (Score:3, Interesting)

    by edmicman (830206) on Thursday November 12, 2009 @06:04PM (#30079968) Homepage Journal

    If I buy a smartphone from Verizon and sign a 2-year contract, I'm prepared to keep the phone and service for two years. That's the game and they're setting the rules - if I want to phone and service jump, sure I could prefer not to pay but I can't really find a fault in them wanting me to. Who is this hurting? If you move to a location where you don't get service, they already let you cancel without penalty. How many people actually end up paying the ETF?

    Also, I don't know about the data bit either. My old k1m/krzr went to the "mobile web" or get it now if I hit the down arrow. That brought up a launch screen where I could check account settings (for free), purchase a day's worth of mobile browsing, or sign up for mobile web and have it as a recurring payment. I've never been charged for any sort of access for pulling anything down.

  • Sprint (Score:4, Interesting)

    by Akaihiryuu (786040) on Thursday November 12, 2009 @06:20PM (#30080240)
    I'm extremely glad I finally ditched Verizon for Sprint 3 months ago. Sprint has better coverage and better service for cheaper. Even though my workplace provides a Verizon discount, Sprint was still cheaper. Not to mention with my Verizon phones I was lucky to even get a signal in the building I'm in. With my Sprint phone I get 3-4 bars consistently (all my coworkers with Verizon have noted this too). The 3 Sprint users here are the only ones that can get a signal without going outside. Anyway, I digress...I'm paying $15/month less with Sprint, unlimited data, unlimited text/pix, 1500 minutes/month, free nights/weekends, nights/weekends starting at 7pm instead of 9pm, than I was with Verizon, with unlimited text, but no pix, no data, and my company discount. Verizon has terrible phones, terrible service, and they are a ripoff in general. I switched on the advice of my roommate, who has had service with Sprint for 6 years and has never had any issues. Neither of us understand why they have a bad reputation.
  • by stewbacca (1033764) on Thursday November 12, 2009 @06:31PM (#30080396)

    Paying $230 to break a 2-year contract after one year is far cheaper than keeping the phone for another year at $120+ per month...just sayin'.

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