FCC Probes Verizon's Higher Early Termination Fees

Well knowing Verizon, they will try to justify why. But everyone else already knows why. They just want more money and they will try to get it anyway they can.

this is just stupid they cant charge a premium just because its and "advanced Device"

iPhone Terms and Conditions:
Terms Applicable to AT&T Nation/FamilyTalk® GSM Plans: Credit approval required. Subscriber must live and have a mailing address within AT&T's owned network coverage area. An early termination fee of $175 applies if service is terminated before the end of the contract term. For service activated on or after May 25, 2008 the Early Termination Fee will be reduced by $5.00 for each full month toward your minimum term that you complete. If phone is returned within 3 days, activation fee will be refunded. If phone is returned within 30 days in like-new condition with all components, early termination fee will be waived. All other charges apply. Some dealers impose additional fees. iPhone returns will be subject to a 10% restocking fee, except where prohibited.

Interesting that ATT's Iphone plan's ETF is half of that of Verizon's...perhaps Verizon's higher ETF is to deter customers from defecting to ATT's iphone...is that good enough reason for the high ETF?

It's simple....
An advanced device like the Droid costs $569.99 retail.
Sale price with a 2yr contract is $199.99 after rebate.

If a customer goes into Verizon and signs a 2yr contract, they buy the phone for $199.99. Lets say they immediately canceled service, paying the "normal" $175 ETf. Total cost them was is roughly $375.

Verizon just lost about $195.

You would be surprised how often this actually happens.

May they get tea-bagged by the FCC!

In Canada we just legislated their sorry ass into submission over misrepresenting cost in their publicity/marketing.

Verizon won't even bother trying to justify it. They will just say it is what it is :-/

Verizon: great service; horrible company.

... and typically people do this and just sell the phone on Ebay, which is why Verizon is looking to recoup any lost money.

They will fight it. Hopefully the FCC will find that the hike and release date of the Droid; are a just to much of a coincidence.

They won't back down. Best case scenario : They will add "ETF of $350 minus $10 for each month of service completed OR the remaining of the contract, whichever is lower." This way, a user on his last month of a 24-months contract will pay something around 60$, not 120$ like they currently suggest.

If they don't do that, I'm really wondering how they can get away with this.

@kidaquarius Verizon is trying to get people from ATT so they are playing games by reducing the up front costs to get a Droid to get folks off of the iPhone. People tend to look at up front costs when they purchase phones. Not until they decide to drop the coverage will they be reminded of the $350 dollar termination fee which will lock people into Verizon until the end of the contract term. Pretty smart and devious experiment if you ask me.

Simple solution...if you don't like the ETF...don't get service with Verizon. Total cost to terminate contract on my Blackberry, $375. No big deal really....I only had the phone a couple months, but the $375 was easier to swallow than the $135 a month, which over the course of 3 months would have exceeded $400. Was easier to explain to creditors that I needed some help for 1 month, than needing help for the 21 months I had left on my contract. If you want a phone that retails for $500+...you should be expected to pay a bit more at termination, if done early, than if you get a phone that retails for $200-$350. Companies don't stay in business by losing money.

I refuse to get a phone on contract... I'm also not paying that damned much for a phone.

$20 prepaid cell phone from Wal-Mart anyone?

Wrong. They still make money, just not as much as they want to. You'd be surprised how often they inflate their prices.

sorry i'm one of those people who can't take having a limited amount of minutes every month. contracts are the way to go for me.

and your just looking for trouble when getting anything from wally world

Verizon: We're upping our ETF from $150 to $350. At the end of a 2-year contract, you could still owe us $120.

FCC: That's not acceptable, you can't raise your ETF that high.

Verizon: Ok, Ok, fine, we'll revert the change from $350 back to $250

FCC: Good, that's acceptable.

Customer: WTF?

I think if you can provide a just reason for cancelling your service, you should be allowed to have the fee waived (i.e. Losing your job, death of the primary contract holder etc.)

If someone keeps signing up and cancelling their sercvice, that would be a red flag of a reseller.

I agree with Kri77777..........Great Service....horrible practices.

-PM

Why is the Government getting involved in a private company? If you do not like their service, do not do buy their product, it's that simple. What gives big brother the right to tell a company what they can charge for their services? OK so next they will tell me & my small company what I can charge for my services. We need to take our country back from these fascist (fascist: a tendency toward or actual exercise of strong autocratic or dictatorial control).

While I agree with you up to a point, that still doesn't explain why it's still so high lets after a 1 1/2 or EOC. Surely Verizon has made some profit that recoups the cost of the phone after a year or more worth of service.

Its because all the big brothers are related! If the all practice in the same manner then there aren't any real choices that are equal to. A wally world phone is not a real option for most users. You're forgetting we live in a capitalist society where greed to its own downfall is the status-quo. Unless you are suffering from Anterograde amnesia then lets not forget our recent economic collapse.

How exactly is unilaterally changing a contract that is already signed supposed to be fair. Ever heard about a thing called price fixing? Obviously not. They should be forced to remove hidden charges from their contract, if the phone cost 500$, sell it for 500 fucking dollars. Activation fees and system access fees are marketing gimmick, not a funding principle of capitalism.

Think a bit more before yelling fascism... Have you been arrested for political dissension yet?

Does Verizon operate anywhere else than the US? If so, do they have this fee there?

What are you talking about, do you even know? Yes there is greed in this world, but I would say big brother/government is the greediest of them all.
About the recent economic collapse, this was caused by our big brother/government telling banks to lend to people who cannot pay it back. Also greed is when a customer signs a contract for a phone, then turns around & cancels the contract & is able to keep the phone.
People like you will keep this country in economic decay; if companies cannot make a profit then we all will be unemployed.

After the FCC hears Verizon's lame excuse alibi, stop Verizon from charging this much. It is grossly exorbitant. What's stop Verizon from charging $500? $1000? Something's got to be done.

If you so are F-ing smart why do you have to rely on the government to run to your side every time you get in trouble. Why can’t you figure it out for yourself, can you say boycott.
Yes if you keep sucking on the government tit & then you will be arrested for political dissension one day.
What about individual responsibility, yes you sign a contract & I bet my pay check, in that contract it says they can raise any fees, at any time, if they see fit. Do not sign a contract if you even think you may not be able to pay for it. Again do not run to the government every time you get in trouble, if we do as a people we will become slaves to that government

Verizon will try and justify the new, higher ETF to the FCC. Verizon is probably preparing for its new I-Phone, that is going to be a failure and is look to cash in on people backing out of there contracts in the future

the answer is simple. everyone wants a blackberry or other pda for nothing extra a month when there would be no point in having it which thus went to the $30 data package. step two is the phone cost. they cost roughly $500+ for stores to get them in, mind you some are privately owned. Now the third step. What happens when a customer cancels within 6 months about on their contract? That person that privately owns a store not only looses a customer. They have to cough up money for that phone. so, if for example i had vzw and canceled in 4 months and it was a $599 blackberry, whoever is the person that owns the store just lost $599. it's compensation. While at the same time, i can see the customers point of view. that's the most logical reason i can think of. correct me if im wrong.

Whats to stop Verizon from charging $500 or $1000? You....idiot! Don't get their service if they charge too much.

ehh.... Someone has to pay for all these great commercials, right?

I guess somebody has to pay for all these entertaining commercials running in the expensive time slots, right?

I can understand the $350 ETF because how expensive most of those PDAs and smart-phones cost. However, the discount on the phones are only $200 so it would make more since to have the discount be the same as the ETF considering that is what the carrier is protecting. Secondly, the monthly deduction of the ETF should be increased to $14.58 in order to make any ma thematic sense.

Otherwise there is no legal reason for the ETF in the 23 month still be $120-150 dollars.

But the phone that was 569$retail cost verizon what? 400?

I mean thats like saying a grocery store pays 2$/lb for apples..

those things are 66% gross profit.