The government is just about the last place we'd look for helpful pointers on much of anything, much less when shopping for a new phone -- but that didn't stop the
FCC's Consumer Task Force from whipping up a PDF of things you can to do prevent yourself from getting burned with a multi-hundred dollar early termination fee when buying the handset of your wildest dreams. There's nothing in here that isn't obvious to a seasoned phone buyer -- buy the phone at full price instead, ask about a trial period, look into proration, and so on -- but it goes without saying that these are the kinds of tidbits average consumers should know before setting foot in the store. Perhaps the more interesting thing about this effort on the FCC's part is that it indicates the feds haven't forgotten about the
stink it made about rising ETFs not long ago -- and
AT&T's move to hop on the bandwagon can't be helping to smooth things over in Washington. Anyhow, go get your learn on before some seedy carrier sales rep takes advantage of you, won't you?
posted May 26th 2010 10:31PM
that's no help
@ndroid They should have simple posted a big .pdf that said "Don't be a moron... read shit before you sign."
@Stewie Vader
I did, but they didn't read it.
First.
Downrank as appropiate.
@techee44
Don't you feel stupid
@techee44
what an idiot.. you weren't first anyway.
Statements like this from a federal agency always precede statements about how federal agencies see nothing wrong with price gouging from private corporations...
@Sofabutt It's not like they are a monopoly, so what's the big deal?
I pay $3.33/m for phone + unlimited data (slow as hell though) on a prepaid plan from Boost.
this should of posted in the early 90s.
They need to weigh in on what legal pro-rating is. Like that the amount per month has to be constant and the value must reach zero at the end of the contract. AT&T's $10 per month for 23 months then $105 the last month should be illegal. But other than that, AT&T has the right to charge what they like, as long as the language is clear and in your face.
Besides, you MAY still be able to cancel without paying the ETF if you're lucky. Just wait for AT&T to change the terms of service (as Sprint did in December 2009, T-Mobile in Sept 2009, and Verizon in spring 2008).
@Fanfoot There aren't many ways to get out of an ETF, and some companies are making it harder, by, for example, NOT waiving ETFs if you move to an area that is not covered by your provider, which some used to do. But those dumb jerks who ruin things for everyone had to figure that out, and use it to defraud those companies, by, for example, buying 5 smartphones under Uncle Hong's name even though uncle Hong lives in Shanghai, then suddenly, Oh, Uncle Hong's moving to China, we have proof, so waive my ETF. This example BTW is not meant to say anything bad about the Chinese, it's just an example.
And I don't see why it should reach $0 by the end of the contract date, the whole point is to recover revenue lost by buying a phone, then not spending money with the carrier. Now, I can see reducing the ETF based on a percentage of the revenue you bring into the company, how much you pay for your monthly services, but that would require a LOT of extra bookkeeping. If it were automated it might be okay though...
@billyuno You get the same discount after 2 years (new every 2) as you would if you signed up for a new contract: one way or the other, there's a sunk cost going towards a phone which is no longer being used, so why the $100 overhead for non-new customers?
LIES. ALL LIES. FOX NEWS TOLD ME THE FCC IS GOING TO TAKE OVER THE WORLD AND ENFORCE OBAMACARE!!#@!!@#$!$#?
(That was sarcasm btw...)
@CJisohsocool You say that as if its a bad thing.... ;)
Unless I'm missing something, I think it's a smart idea on their end to raise the ETF's. If I was going to buy a smart phone without a 2 year contract, well before, I wouldn't have. I would've just bought the phone on 2 year contract, terminated my contract and basically have bought the phone for half the price it would've cost me without having signed the contract. Atleast now this is more of a deterrent.
@DarrellJ88 That, and if you still do that they recover more lost revenue.
Here's the best tip:
- Do more research when buying a device, buy it full retail and go month to month instead of locking into a contract. Ez.
If you can't afford full retail, all the more reason not to screw around with your money and contract, trying to get the latest and greatest every 3-6 months. Time to evaluate yourself...
@Plazmic Flame Not all companies offer that option unfortunately. However I do have better things to say about 30 return policies, but you have to be careful there too. The iPhone return policy is practically draconian.
@billyuno It's 30 days with a 10% restocking fee. Better than all their other phones with a $35 restock fee. I know Verzion's like that too, but I'm not sure about Sprint or T-Mobile.
May indicate the feds haven't forgotten, but it does seem to say they have given up. Like fanfoot I think they should at least weigh in on rediculous pro-rating schemes that have non-zero remainders at the end of term. Even before the rate hike, with AT&T you could have paid more for ETF during the last three months than you would just coughing up the regular monthly fee. Would seem simpler to understand if they just 'financed' the full phone price over the contract, billed it monthly, and you owed the balance if you wanted out.
BTW, folks really need to be careful about what they sign. The two year contract reads the same whether you walk in with the phone you plan to use, buy it outright, or get one subsidized. You can find yourself with an ETF whether or not you get a subsidized phone.
@sejohannsenearthlinknet
This is what I was wondering. That's a bit ridiculous to have that ETF when you already own the phone. I figured it was only for subsidized phones, because that honestly makes sense. Thanks for clarifying that because I didn't know.
@sejohannsenearthlinknet
that's wrong actually. If you provide you're own phone equipment you absolutely DO NOT have to sign a contract. If a sales rep ever tells you that they are lying. If they dont get you to sign a contract they lose commission, their numbers go down and further puts their jobs on the line. By a phone outright and go month to month, by it subsidized thru the carrier and you play by their rules.
I don't live in the US, but as a reference, in Europe, more precisely in Orange Spain, the ETF varies depending on the time you have left on your contract and it's the same regardless of the phone you have. You start at 170eu, and every 6 mo, it goes down to 140, 100, and 70eu (the standard contract is 18mo).
As of the need to sign or not a contract, an Orange rep would tell you that the ETF is not only about subsidized phone, but also for giving you better rates than prepaid or pay as you go options. I dunno if it's BS, but every rep I've talked to tells me the same, which tells me they've been well trained to answer that question, at least.
@gdbw1978
reps do not make any more if you sign a contract. When you provide your own phone the rep is just having you sign agreeing to the terms of service, not a contract. If the rep does have you sign a contract he is just mistaken, not trying to rip you off.
As a side note though, I am so tired of hearing people complain about etfs, having a cell phone is not a right, you are paying for a service. If you don't like it, get your service from someone else and don't sign the contract. AT&T could tell you to stand on your head when using the phone and people would agree and sign but then complain when it is enforced. The fees are justified with the retail costs of the phone, get over yourselves.
If phone companies gave the very best service, they would not need to have termination fees.
the higher the fee the worse the service. the onl slide rule thingy.
@Pauline 2 Verizon has had one of, if not the biggest ETF for the last 6 months or so until AT&T ups theirs next month. And I'm guessing many people would question whether Big Red is the worst...
@Pauline 2
It's not so cut and dry. Most people leave their cell carrier due to better pricing, even if it comes at the expense of worse coverage. How do you think Cricket, Boost and Metro PCS have done so well.
@hated one
I went HTC HD2.
Tmobile with purchase not discount.
@Pauline 2 It's really not a question of service, it's a recovery of costs. There are 2 choices that a mobile company has to make. Either take costs and spread them out amongst everyone, which doesn't seem to fair, or charge them to the people who are causing those costs.
@hated one
Do it and face a harsh case of buyers remorse when the new iPhone is released.
So if you buy a phone full price do you actually get a better/smaller monthly bill? If your monthly contract is subsidizing the cost of the phone, then shouldn't your monthly bill be smaller if you buy your own phone? I've never really seen this happen though, which makes buying unsubsidized phones seem like a poor decision.
@tad604 You do if you get one of T-Mobile's Even More Plus plans, which are contract-free and usually $20/mo less than the equivalent contract price. You end up saving money no matter how long you stay with T-Mobile, since they don't subsidize for more than $480 on any of their phones. I believe you can even pay off the the cost of the phone over 24 months on your bill, making this method obviously cheaper than the contract price.
Hopefully other carriers will at least give us the option of going contract free for cheaper in the future.
@tad604 That's actually not a bad question, and the answer goes something like this: The benefit of a guaranteed long term customer is worth the cost of subsidizing the phone, and the ETF is the fallback if that customer turns out NOT to be long-term. Companies budget and plan in advance and spend money that they EXPECT to earn all the time, and they base that expectation on new accounts with 2 year commitments.
They may get the same amount of revenue with someone who does NOT have a 2 year agreement, but there's no guarantee that customer won't leave after 2 months, as is their right. So they can't plan on that customer like they can on those who sign contracts. It's all about expected gain, future earnings. They reward customers who are loyal.
@Lyrrad If they give you the option to pay over 24 months, then you decide to cancel your service after 12 months, wouldn't you have to simply pay the balance for the other 12 months? Like all at once? How is that different than an ETF?
@Lyrrad Looking at their family plan it's only 10 bucks less a month for buying the phone upfront. So assuming you're looking at a new phone and two years... that's 240 dollars. The only issue I see is for the past few years I've been wanting to upgrade my phone once a year and not once every two. I think they end up subsidizing the cost more than 240. This would possibly be offset by the "able to switch carriers for a better deal" except your phone is pretty much locked to a carrier anyway. Even if it's unlocked, you're not going to be able to get the full potential out of a phone except for the network it was built for. Ironically if there was a single standard for cell communications we'd probably have more actual competition.
i dont see the problem... get a 600 dollar phone for 100 on contract.. cancel it a year later and they charge 100-200 to recoup after you bailed on a contract? You are still up a pretty penny.
people just need to realize hey I'm signing a contract for 2 years so that i dont have to pay a high price for my phone... and if i cancel i will have to pay back part of that phone..
Idk what the prob is.
@schultz EXACTLY! Thank you, finally somebody with some sense. It is just as simple as that.
AT&T customer got boned... Hard! Now I'm ready to see my T-Mo early termination fees on my next bill. I promise not to faint and squeal.
@cdf74dc9 Only new AT&T customers are affected by the new ETFs, and they all still have the choice to buy at full price if they want. No discount, no contract, no ETF. Existing customers will keep their current ETFs. Besides, the ETFs for non-smartphones are going down. How does THAT bone customers?
@billyuno it bones them because Att is terrible with or without a contract, it doesn't matter. just a horrible horrible company, even back when I was a child and they only did land lines. They were bad back then even.
If the carrier is willing to sell the phone outright for full cost and allowing me to go month to month, I have no problem with them having high termination fees for those that make the choice to purchase a subsidized phone. It's when they start saying that to even have service with them you have to have a contract that things get unfair.
What is proration?
@AwhDeeOh To decrease the ETF over time. So, if you cancel one month early you pay a portion of your fee (likely to be about half of your phone bill). If you cancel after 6 months, you pay between 75-85% of the ETF fee.
Well I almost ALWAYS buy the phones at full price just because I don't like to be tied down and can choose whomever I want to be with. Yes, I am a cellular Slut! But so far I've always been deeply in love with T-Mobile, they my Bitch BUT if an attractive fox should ever walk by promising greener pastures.....
Am I missing something? You're going to need service anyway so why not get the phone at the discounted price? Because most phones are carrier specific, it's not like you can hop from carrier to carrier. Idk... I just don't understand the benefit of paying full price.