Are you thinking about changing your wireless telephone service provider before your contract expires? Make sure you check with your service provider first! You could be required to pay a hefty Early Termination Fee (ETF).
An ETF is a fee that you agree to pay to a service provider if you end a service contract before it expires. ETFs are included in contracts for a variety of services including wireless telephone service, cable and satellite TV, and health club memberships. ETFs charged by wireless telephone service providers vary greatly. Depending on your service plan and type of phone, there may be no ETF or the ETF may be over $300. While ETFs are generally pro rated over the term of the contract, they don’t all decrease at the same rate.
The FCC’s Consumer Task Force offers these tips about avoiding ETFs:
- When signing up for a new cell-phone service, make sure you are fully aware of any ETFs.
- Ask how much the early termination fee will be and how it is prorated.
- Ask if it would be possible to buy a handset at full price and avoid an ETF.
- Think before you make any changes in your contract, such as buying a new phone or more minutes that your carrier might offer. This could trigger a new two-year contract with another ETF.
- Ask about the trial period during which you can cancel the service without an ETF penalty. This is typically 14 to 30 days.
- If you use your phone sparingly, consider avoiding the whole ETF issue by buying a pre-paid phone. These phones do not involve a contract.
What is the FCC doing about ETFs?
To better understand consumer experience with ETFs, the FCC did a Survey that queried consumers about early termination fees (ETFs) for cell phone and home broadband service. Only 36 percent of cell phone customers who are familiar with their bills said that the service providers' bills included “very clear” information on ETFs. Even when consumers knew they would incur a fee if they tried to terminate service, many did not know what the fee would be.
The FCC also wanted more information about ETFs from the wireless telephone service providers. So, in December 2009 and January 2010, we sent letters to numerous mobile telephone service providers asking them for information about their services and fees, including ETFs. You can click on the responses below.
FCC Letters to Carriers about ETFs:
Responses to FCC Request for Information about Early Termination Fees:
AT&T Response 
Google Response 
T-Mobile Response 
Early Termination Fees: Share Your Story 
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For More Information
You can also contact the FCC’s Consumer Center for more information about
Early Termination Fees or other communications issues by calling
1-888-CALL-FCC (1-888-225-5322) voice
1-888-TELL-FCC (1-888-835-5322) TTY
1-866-418-0232 fax; or writing to:
Federal Communications Commission
Consumer and Governmental Affairs Bureau
Consumer Inquiries and Complaints Division
445 12th Street, SW
Washington, D.C. 20554.