CONSUMER ALERT

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It’s looking like the beginning of the end for those triple-digit early termination fees that have trapped consumers in cell phone contracts or required them to shell out hundreds of dollars to get out early.

Two of the biggest cell phone companies have already started scaling back termination fees, two others are preparing to, and the Federal Communications Commission (FCC) is also on the job.

But consumers shouldn’t get too excited just yet, cautions Angie Hicks, founder of Angie’s List, (www.angieslist.com), the nation’s leading consumer rating service.

“These early termination changes would only affect new customers,”
Hicks said. “Current customers who are facing early termination fees will need to be smart negotiators if they want to get a break.”

The FCC met June 12 to discuss an industry-sponsored proposal that would give new cell phone customers a 30-day grace period to cancel their contracts without penalty. After those 30 days, early termination charges would be pro-rated over the life of the contract.

Pro-rated billing would result in customers paying much less to terminate a contract in its 20th month as compared, for example, to its 4th month of service. The termination fee proposal comes as cell phone companies are facing class-action lawsuits that claim the early termination fees are unfair. If the FCC approves the proposal, those lawsuits could be dismissed.

“Sometimes you can’t negotiate your way out of early termination fees, but it’s definitely worth a shot especially with these changes underway,” Hicks said. “The worst thing that can happen is the company won’t budge. But if you keep your cool and plead a good case, you could undo the contract you’re in and get a fresh start.”

Angie’s List Tips to avoid paying a full termination fee:

Know your contract: Understand what you’ve signed up for, so you can negotiate out of it. Have your contract with you when you approach the company and quote from it to bolster your position especially if you didn’t get all the service the contract promised.

Shop the competition: Determine what other providers are offering and use that as leverage. Even if you have to pay a termination fee, you may be able to save overall by jumping ship.

Start with the Customer Service Department: Lay out your case for why you want to end your contract early. Be specific about what you signed up for and outline what you haven’t gotten (if that’s the case.) If necessary, go to the top: If the representative insists that you must pay the full termination fee, remind him/her of the actions the FCC and some providers are taking. If you still don’t get anywhere, ask for a manager and lay out your case again.

Ask for customer retention department: If you have a good payment record with the company, ask to speak with the Customer Retention Department and lay out your case one more time. If you have a good record, the Retention Department will work hard to keep you as a customer, possibly forgiving the termination fees altogether and offering you a better deal.

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