Verizon looking to bump early termination fee to $350 on 'advanced' devices
By Darren Murph 
posted November 4th 2009 8:42AM
posted November 4th 2009 8:42AM
posted November 4th 2009 8:42AM
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ouch! that hurts.
All you people whinning...don't buy their damn service!
Keep saying that till YOUR carrier says "Hey, look what verizon did, we can do that too !!"
iDon't have exorbitant early termination fees.
K.. first of all, when i signed up (2 years ago) you COULD NOT sign up with the mighty VZW WITHOUT A CONTRACT
I spent 8 years on Sprint before then out of contract because i refused to sign a contract, always paying full price for my phone..
Now, secondly.. The price of phones... Lets get real here people... These phones DON'T COST $500..
Back around 2006 i believe i purchased a Dell Axim x51v (made by HTC no less).. 624mhz, 3.7in 640*480 screen, yatta yatta, and it was $379.. Granted it wasn't a "phone" but not far from it... Compare that to lets say a verizon HTC Imagio which has a month to month contract price if 579.99 ??? really ?? You mean my dell is still worth more than when i bought it ??
Yes, i realize the Imagio is a phone and has more ram.. i get it, but seriously it doesn't take that much money to add the "phone" guts
But, the Axim also had an Intel 2700G 3D multimedia accelerator with 16MB video RAM, VGA out, and CF support so i'd say they about even out...
For now, i'm assuming this insane hike is for laptops or netbooks...
-= Aaron =-
you can sign up month to month now, or 1 year if you wish.
you forget that your dell CANNOT be put on a plan, meaning there is no real way for anyone to subsidize it. Carriers make very little profit on selling phones retail, but because they subsidize them so much (sub 200 for the latest and greatest) cell manufacturers can charge basically whatever they want for the phones because they know that the consumer will rarely have to pay that price.
those phones don't cost the retail pricing, but they are dang close (well under $100) for the carriers to purchase. If they were cheaper, carriers would offer them free on contract.
$350 is insane!!! I haven't seen anyone here mention that the telecommunications industry has one of the highest profit margins around (~20%). This is one more way to gouge the consumer, and I hope Verizion pays for it. I've never been a fan of Verizon, whether it is their proprietary software or exhorbant prices. The subsidize smart phones only slightly more, if any, over regular phones (normally $200 across the board), so this rate hike is ridiculous. I understand wanting Verizon to protect themselve from flippers, so I'm fine with the $350 to start, but after six months (or even 4), it should go down dramatically, say to $150-$200 and then $10 off per month for the remaining 18 months of the contract. Get a life Verizon.
the typical "basic" phone has a retail of 140-306 (that is from the Smooth to the EnV3) The cost is 80-246.
The typical smartphone is 480-599, the cost being 420-539. And yet you can get that 539 phone for 200 on contract, and you can get an env3 for just under 200 on contract.
Carriers take a significantly higher loss on smartphones.
You don't like the ETF then:
1-buy the phones retail/used and never sign a contract
2-sign a 1 year contract, that way AT MOST you are stuck with them for 11 months (you get 1 month to try out the phone/network when you sign up, etf free) and you still get the phone at a significant discount.
3-sign the two year contract, and stick it out like 90% of customers do.
Seriously... why is $175 totally acceptable, but 350 is outrageous.. does everyone here routinely carrier hop before their contracts are up?
this rate hike is ridiculous. I hope they reduced their high as Plans for this ETF HIKE
WTF Verizon You just Became the Douch of the Telecom
Verizon is the most f**ked up company I have ever seen.
HAHAHA! You guys are a bunch of f*cktards. Every cell phone company is gonna put it in your ass and twist it. It's called big business. The reason they can do this is because just about everyone owns a cell phone. Verizon has great coverage but shitty phones, AT&T has great phones, shitty everything else, Sprint well....I am interested in what they have to offer (don't know a lot about them). With Verizon getting the Droid and having the coverage they do it's going to be hard to tackle them other than AT&T with the iPhone...and that's the only reason they are still alive. I am on Verizon and haven't had any issues with the customer service or coverage just the shitty Storm I foolishly bought. But AT&T I had to report to the BBB for them to stop their bullshit. I want the iPhone but I will not give AT&T anymore of my money. So either stop buying cell phones or quit your bitching. Be happy your not literally being raped by them.
I'm willing to bet Att is going to do the same thing. Think about it. APPLE IS VERY GREEDY. I work at a store that buys iphones from apple @ cost. Guess what the discount is? about $25. We sell those at a loss of $400 per phone on a plan only to have that person cancel and flip the phone on ebay. Net loss to us? $400. Everyone assumes that verizon pays a lot less for the phones. They dont on smartphones. Cost is normally $25-$75 less than retail price. Which still means a loss for consumers. Honestly i would like to see ETFs based on the subsidy that you get on the phone. Have it decrease from that. 599 - 199 = 400 to start. $10 less per month. Maybe then we'll see less people scamming.
AND i dont buy the argument that you have to factor in the first month's bill. Only true if you dont use the service. For that 1 month's bill you're recieving service aren't you? You're using it.
If Honda gave out cars only to require you to buy gas for it every month from them do you think you can not buy gas and keep that car? I dont think so
Not sure if anyone has explained this, but do any of you even understand why they are doing this?
Let's see, retail price of Droid... let's assume is going to be $600 (that is what Best Buy is charging at least).
So, I have a family plan... I could add a new line and get the Droid for $200. The next month I could cancel my new line (connected to the Droid) and pay the $175 fee.
So, now I've spent about $400 (200 for phone, 175 for term. fee and then approx 40 for 1 month's service)and then I could sell it on ebay for $500 for profit.
It is a scam they are trying to prevent. Why would any business allow you to do that? You cost them money and profit for yourself.
The problem is that Verizon DOES NOT pay what you and I would pay "full retail". Anyone who actually believes that they pay MSRP is extremely gullible!
What's your point?
The fact still stands that you can get into a contract and get a phone for cheap, cancel the contract almost immediately, sell the phone and profit.
Why would Verizon or any of the phone manufacturers they work with (Motorola, LG etc) find this acceptable?
I will still get the droid and sign up before Nov 15th. I have been with verizon with No contract for the last 2 years. I did not sign up with them because the motorolla i had was good and their service was the only one that worked in my house and in the mountains of colorado and when I drive to Texas.
Now with free GPS this is the way to go.
IPHone is awesome but just cannot get ATT service. So Droid will work perfectly
You actually think phones are cheap from carriers? Verizon would never artificially hike up retail price to bully you into signing a contract though, would they?? Just something to think about. I just don't see why any consumer would actually defend this policy change from any business as drastic as this is? I also do not see how the whole "scammer" argument is a big enough deal to really justify this. Correct me if I am wrong, I do not remember hearing that Verizon is anywhere close to going "into the red".
Why would I defend it? It is simple. I am a customer who honors the contracts, so the termination fee doesn't apply to me.
So, when people take advantage of the system... this makes Verizon have to recoup those costs somewhere else. And that means other products or services will end of costing more. Which will then make the people like me have to pay more.
It is plain and simple. Let's take Verizon out of the situation and have a generic situation.
Some company offers to give you a $500 product for $200 if you use their service for 2 years. If you break the contract early, you have to pay $200.
Now, if the company offers to give you a $1000 product for $400 if you use their service for 2 years. Doesn't it make sense that the early termination fee would be twice as much?
Makes sense to me.
I could understand that basic argument, however this whole topic deals with Verizon. Bottom line is they are using the excuse of scammers(which I agree can be a problem) to raise their already outragous ETF. This is from a VZW customer who has always had problems with them, but because of where I live they are my only real choice!
Fortunately the small but mighty, U.S. Cellular, is continuing to focus on their customers. Their ETF's start at $150 and prorate after 4 months, getting lower and lower. They don't penalize you for having changes in your life and don't contract you to until you die.
Actually at&t is already considering the same thing after they have had the same issues with the iphone that verizon has with people returning these devices that are costing them upwards of $500 or more and now they can't use them because people didn't take the time to really consider what they actually wanted or needed in a smart phone. Don't believe, ask the manufactures what they charge, there not giving them away, or listen to the guy from Canada on what the rest of the world charges. Or fall in the customer bank that at&t commented to not be smart enough when commenting on how there customers don't know the difference between there 2g and 3g coverages. Unfortunately we all suffer when the rest point fingers before fully understanding.
I know in the past like when Verizon raised text messaging fees a lot of people used the "material adverse' claim in the contract to get out of their contract without paying any ETFs. Does anyone think this increase in price could be a way out of a contract? I have wanted out for so long and just cant bring myself to pay the damn ETFs. The only problem is I don't really have an "advanced" phone...ughhh....but I think it might be worth a fight anyway.
Here's why EFTs suck.
They give you some bs MSRP price to justify the EFT For instance
Moto W755, 2 year contract FREE, month to month $249.. Ok, so that must be a really advanced phone ?
The same phone from WalMart (Pre-paid on the Verizon network)
Verizon Impulse W755 $128, yeah half the price of VZ
The phones don't cost that much people..
and, to all the "this is only hurts phone flippers, why would you change ?" people..
What about the guy down the road who just got laid off and is now realizing that a cel phone is a "luxury" ?
What about the guy who just got a divorce and doesn't want his ex on his plan anymore ?
What other service do they "lock you in" and then proceed to do whatever they want to your service and or contract ?
XM/Sirius, nope.. Comcast TV, nope...
I for one am a little pissed because when i signed up with VZ one of the draws was the new every two.. After two years, get the 2 year contract price, plus $100 off.. Sweet, Sprint didn't do this.. Now, VZ decided it would be cool to CHANGE my contract to make it $50... WTF ?? I can't change my contract, but they can.. Sounds completely fair .. drr
Verizon isn't hurting for money.. Yes, they may loose money on the phones.. When you get a chance do some research on the Gillette company, they sold razors AT A LOSS because they knew you'd come back for the blades.. VZ makes all their money on the service.. You think it really costs any money to send a txt ?? Really ?? And it cost $30 for data, and another $30 to tether ?? riiiight ...
If the telcos would get smart, they could avoid the whole "flipping" issue.. Allow customers X amount of phones within X amount of time.. If someone goes in every two months, gets a new phone, and then cancels it, FLAG the customer and the ESN of the phone .. Simply don't allow that ESN to join the network.. Sure they lost that phone, but i seriously doubt Mr Flipper is going to try it again when his angry customer approaches him with a dead phone.. But no, the network isn't going to do this, why ? Because they are using flippers as their scapegoats ..
Darren, I wanted to address the Verizon subscribers who would be affected by this increase of ETF because they are considering changing to another provider due to a high Verizon plan cost. We tend to think of wireless costs as fixed, but you can tinker with your current Verizon Wireless plan to optimize its features to best suit your usage and often generate significant savings in the process. I know this firsthand because I work in the consumer advocacy division of the company Validas, where we electronically audit and subsequently reduce the average cell bill by 22 percent through our website, http://www.fixmycellbill.com (and I'll add that 22 percent equates to over $450 per year for the average user). Put simply, Validas guards against frivolous and unnecessary charges that over-inflate a cell bill.
You can find out for free if fixmycellbill.com can modify your plan to better suit your individual needs by going to the website. For more info, check out Validas in the national news media, most recently on Fox News at http://www.myfoxtampabay.com/dpp/consumer/conlaw/lower_cell_phone_bills_072409 .
Good luck to everyone reading on cutting the wireless costs, especially in light of this unforgiving economy.
Dylan
Consumer Advocacy, fixmycellbill.com
At&t went to $300 early termination fee. Its prorated just like Verzion so it goes down $10 each month.