Verizon Wireless doubles early termination fee - $350! on certain devices

[Kalimotxo]

Verizon - Starting Nov. 15, Verizon plans to double its early termination fee (ETF) -- to $350 -- for customers who end their cellphone contracts early. The fee, arriving just in time for the holidays, applies to customers who have a smart phone or other advanced device on a one or two...

Sources:

Verizon Wireless doubles early termination fee - Technology Live - USATODAY.com

Verizon to raise early termination fees for 'advanced devices' | Dialed In Podcast - CNET Blogs

[Mobile Mike]

Clarification: It is NOT on all devices or smartphones, ONLY high end smartphones (Droid and Blackberry's, to name a few), those considered "advanced devices".

This is not an across-the-board ETF increase.

[Kalimotxo]

Originally Posted by Mobile Mike

Clarification: It is NOT on all devices or smartphones, ONLY high end smartphones (Droid and Blackberry's, to name a few), those considered "advanced devices".

This is not an across-the-board ETF increase.

Thanks for clarifying on that's it's for advanced devices...

So with the increase in ETF... does this mean that we'll see an increased subsidy on the handsets?

[Mobile Mike]

Originally Posted by Kalimotxo

Thanks for clarifying on that's it's for advanced devices...

So with the increase in ETF... does this mean that we'll see an increased subsidy on the handsets?

Sadly no. This increase is in response to scammers who apparently take advantage of the "buy one, get one free" offers where they start a line of service, disconnect, and sell the phone for a profit, according to Boy Genius Report. So this is an apparent deterrent (as Verizon seems to believe).

So there won't be any more of a subsidized price than what we already see. You know Verizon comes up with ingenious ways of making money, so now they've stumbled on yet another way...

[larry]

If a lot of people are scamming Verizon then I don't blame them for wanting to increase the fee. I wonder if other carriers will follow.

[crood]

To be fair, I usually find Verizon's subsidized prices to be lower. As an example, their version of the HTC Hero, the Droid Eris, will be $99. It's $179 at Sprint. Of course, you more than make up the difference on the price of the plans.

[Kalimotxo]

Originally Posted by larry

If a lot of people are scamming Verizon then I don't blame them for wanting to increase the fee. I wonder if other carriers will follow.

Sprint will not be, according to their latest tweet:

"One more tweet on ETF policy. We won't be following suit as other carriers increase fees. Official Sprint ETF policy http://bit.ly/493Yjz"

[crood]

Of course Sprint just announced they're laying off over 2000 people, so it might be a case of picking their poison.

[Mobile Mike]

Looks like lawmakers are none too pleased with Verizon's ETF increase:

Update: Lawmaker to introduce bill on cancellation fees after Verizon's increase


Sen. Amy Klobuchar (D-Minn.) said Monday she plans to introduce legislation to keep wireless carriers from unfairly raising penalties on consumers who cancel their contracts early.

The decision comes after Verizon Wireless said last week it plans to double the early termination fees it assesses smart phone owners who ask to get out of their two-year service contracts. The new fees, which would total $350, are scheduled to go into effect Nov. 15.

Klobuchar wrote a letter to Verizon Wireless CEO Lowell McAdam Monday, telling him that the decision was "anti-consumer" and "anti-competitive." She said more and more households are relying on wireless services as they cut the cord on landline phones.
Charging hundreds of dollars for leaving a contract, even if a customer moves to an area that no longer has service by their provider, hurts consumers, she said.

Wireless carriers responded last year to Klobuchar's criticism of the fees by pro-rating their penalties by the number of months served in a contract. The carriers say they try to keep customers in long-term contracts because they need to make up the costs they incur by selling phones at a steep discount.

Klobuchar also wrote a letter to Federal Communications Commission Chairman Julius Genachowski asking that the agency also investigate Verizon's move.

"Verizon Wireless’ decision shows us once again that the wireless industry cannot police itself and will not, on its own, make its practices more competitive and consumer-friendly," Klobuchar wrote. "To that end, I urge the FCC to review the recent Verizon Wireless decision as well as the competitive and economic impact of ETFs on wireless consumers."

Continues here: Post Tech - Update: Lawmaker to introduce bill on cancellation fees after Verizon's increase

[Tony E!]

Originally Posted by Mobile Mike

Sadly no. This increase is in response to scammers who apparently take advantage of the "buy one, get one free" offers where they start a line of service, disconnect, and sell the phone for a profit, according to Boy Genius Report. So this is an apparent deterrent (as Verizon seems to believe).

So there won't be any more of a subsidized price than what we already see. You know Verizon comes up with ingenious ways of making money, so now they've stumbled on yet another way...

Ain't that the truth.