Cancel Verizon Without Penalty Over Admin Fee Increase

Customers can use a new Verizon fee increase to cancel their contracts without penalty, reader eightkid points out in the comments.

On your February bill, Verizon noted that they increased the administration fee from $.40 to $.70. The pertinent section is shown above (click to enlarge).

This constitutes a material change to contract and under standard contract law, you’re allowed to leave contract without penalty.

The customer service rep may argue that the change is too small for it to be considered materially averse. They will make you feel silly and small. They may keep talking over you. You just need to keep saying that you find it to be so, and please cancel your contract without early termination fee. — BEN POPKEN

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  1. kenposan says:

    Wondered why my Verizon bill went up. But if I leave them, I have to use of their equally crappy competitors. It’s a lose-lose situation. lol

  2. ckilgore says:

    yeah, what kenposan said. i could cancel and switch to cingular and then my phone wouldn’t work indoors. choices, choices …

  3. Gesualdo says:

    I called to bitch about this price increase, and the supervisor (Kasim?) I talked to only agreed to bypass the termination fee after asking me the following question, “I don’t mean to be rude, but do you complain to your congressman when your taxes go up?”

    I believe this seemingly irrelevant question was an attempt to find out if I was the type of person who would file a complaint which would cause the company trouble down the line. My response, that I am indeed the type of person who does and has complained when my taxes rise significantly while services do not, effectively ended the conversation. He put me on hold, returning to tell me that the termination fee would be waived should I choose to go to one of Verizon’s equally-crappy competitors.

    I’d be curious if anybody else received a question like this, and if they were denied if they gave a different answer.

  4. danieldavis says:

    Altel and Verizon both compete for service in my area. I’ve been looking for a good opportunity to switch, plus I can get a new phone…

  5. 5yearwinter says:

    @Gesualdo: My guess is you give them too much credit for their craftiness – it’s more likely that the customer service people just hide behind the behemoth of Verizon instead of actually trying to do anything.

  6. davere says:

    I’ve been with T-Mobile for quite a while and I’m happy with them. But I’m curious, what happens when you cancel your contract? Does your number go back to the companies or can you still port that number to another one after you’ve canceled your contract?

  7. davisdan says:

    Nice…I think now is a good time for me to switch…

  8. hang says:

    @davere: You’re allowed to port your number away to a different service provider. Just remember to mention it before they cancel your contract and service. If you mention it too late your number will be gone… Likely forever.

    Also people, RECORD YOUR PHONE CONVERSATIONS WITH VERIZON CSR. Otherwise you’ll be sitting in small claims court like me. Filthy liars…

    I’m going on prepaid phones from now on. Just so much better and cheaper.

  9. hang says:

    @Gesualdo: I would say “Yes you are being rude by not solving my problem and going on a wild tangent here. I’m not under contract with my Congressman so this is completely irrelevant.”

  10. CaptainCrash says:

    @ davere

    http://www.fcc.gov/cgb/NumberPortability/

    You can port over your number regardless of how the relationship with your previous carrier ended. However, the wording of your question sparked another: How long is your number “reserved” for you? If I cancel w/ Verizon on Day 1, and I don’t get a new carrier (let’s say Sprint) until Day 4, can Sprint still request the same phone number for me? I guess it’s however long Verizon keeps the number in its system for aging. Anyone know?

  11. Antrack says:

    I don’t think this is a material change in the contract. Admittedly, I am not yet a lawyer, but I am a law student who has taken Contracts.

    It’s a legal question, and not one that can be answered easily, as there is no concrete definition of “material.” But I really can’t see how you could argue a $.30 increase on your $50 cell phone bill could constitute a material change.

    I think Consumerist should really consider bringing on a lawyer to consult on these types of posts, as Ben seems to be frequently wrong or misleading. Sorry, Ben.

  12. heypal says:

    @ Antrack:

    Others have stated this before, but i think it bears re-examining here. it would seem logical that a “material change” is a black and white issue. Either the terms have changed, materially impacting the customer, or they haven’t. Verizon is playing a numbers game, here, betting that:

    a) most people won’t change service over a few cents. A few cents per customer for them adds up to lots of dollars. It’s us, the collective customer, who foot that cost with no say in the issue. By your reasoning we should suck it up and line their pockets. It’s not too much to ask…

    b) those who do protest can either be talked out of cancelling their service or forced to pay the ETF. They do this by using arguments like yours.

    I am very curious to see what a contract attorney would say to this question. In my opinion, a change is a change is a change. Unless it’s suddenly possible to be kind of pregnant…

  13. Mojosan says:

    I live in an area where I can only get Verizon coverage.

    I have 5 phones with verizon, but one of them is not used.

    I bought my wife a new phone last Christmas and, even though I specifically stated that I did not want any changes that would effect the length of my contract, my contract was extended for 2 years.

    The phone that is not used is a super cheap Kyrocea that I got for my kids as an emergency phone.

    Can I cancel just that one phone using theses provisions?

  14. So 30 cents per customer is not materially adverse? How many customers does Verizon have?

    Is 10 million too large an estimate? Am I doing my math correctly when I state that this increase materially affects Verizon to the tune of 3 million dollars per month?? Am I wrong? Did I misplace a decimal somewhere? Maybe my estimate of Verizon customers is off.

    Lets try One Million. Based on this increase, consumers as a whole would be shelling out an extra 300k per month. Am I missing something here as to what materially averse means?

  15. envy870 says:

    What if I want to keep Verizon for now…. but be able to get out when I want, i.e., pretend like my 2 year contract is up and continue service like the contract is over. Would it be feasible to do something like that, or put on record that you don’t owe the termination fee? I want to switch, but not exactly at this present moment.

  16. I hope the verizon math hasnt rubbed off on me. Better get those decimals straight. What would be righteous is if the customer took that 30 cent increas and only paid them .30 cents instead of .30 dollars.

    hah. in yur face verizon!

  17. Mercuttio says:

    I tried to use this to get out of my contract today. I was informed that they’d just credit me for the 30 cents a month, therefore leaving the amount paid monthly the same and not changing my contract.

    So, great, I’m still stuck with these guys. Anyone else getting the story they told me?

  18. fitzgerb says:

    I was told “sorry no can do,this is a government surcharge and they my contract allows this change legally,” and therefore cannot get out of my contract. What do I need to say for this to work?

  19. Jobeleca says:

    fitzgerb, and the kicker is (just read the contract) it does indeed allow Verizon to change the contract without letting you off the hook due to it.

    Mercuttio, the recourse is to speak with a manager and go into binding arbitration… which you would lose since Verizon made a good faith effort which left your bill untouched for the remainder of the contract.

    FYI: The reason for the increased fee is they spent too much and took in too little last year :)

    What gets me are all those Cingular TDMA customers stuck with a $4.99 charge (intended to get up to upgrade or get lost) which ISN’T covered by the contract, and in four months of dealing with the cancellation requests, not a single one asked for the contract to be waived, even though it was policy to waive upon request.

  20. Barbwyr says:

    I successfully cancelled my Verizon service on 2/28/07 using the fact of the price increase for text messaging cancelled my contract. I used a lenghty Slickdeals Forum to gather the necessary information to cancel my contract as well as obtain a Sero plan from Sprint. Under the Sero plan I pay a lot less money and get a lot more features. (500 minutes, Free Power Vision with unlimited Web, e-mail and picture mail, nights and weekends starting at 7pm, etc.) Since ‘materially’ is not defined in the wording of the contract they cannot tell you that you are not materially affected as this is an arbitray measure. After all, if I decided not to pay one of their fees or to lower it a few pennies what do you think Verizon would do and how do you think my credit rating would be affected?

  21. daveistrad says:

    As a third-year law student who’s seen plenty of contract law both in class, at law firms, and while interning for a federal judge, I can tell you that defining “material” is most certainly NOT a “black-or-white issue.” It is very fact specific. And it doesn’t matter what the aggregate cost to Verizon is for all their customers. All you look at is the contract between one consumer and Verizon, and this change is NOT material. I can tell you right now my judge would have dismissed this case in a second. Sorry, but we’re dealing with a change that’s equal to less than 1% of the total contract.

    Good luck trying though! I bet people can convince Verizon to let them out, but don’t go to court over this.

  22. You’ve got a point there daveistrad.

    I still keep coming back to the ‘what would happen if I didnt pay the increased charge’ question. Wouldnt they come after me and sue me for the money because I am affecting them materially? Boy this whole verizon thing makes my head spin in circles.

  23. grouse says:

    daveistrad: over the course of the contract the cost is more than $3.

    I think an analysis based on percentages is incorrect. If I had a contract for Verizon to provide cell phone service for my large business at $500,000 a year, and then they claimed to changed the terms, increasing my liability by $4,000, would there be any court that wouldn’t rule that it was a material effect? Despite the fact that it is less than one percent.

  24. eightkid says:

    Hey everyone………….I tried the text-message increase route and got a world of B.S. from Verizon’s horrible second tier customer service reps. I read the posts on Consumerist a third and fourth time after I hung up with these buffoons and found a small post about the Admin Fee. I called back the next day and got out no problem. They must have a lot of people jumping ship. It all goes back to the fact that they send you a legal notice regarding the increase. That shows you their liability.

  25. daveistrad says:

    Grouse: I think you’re right based on your hypo. If you had a $500,000 account with Verizon, and the contract change affected you to the tune of $4,000, this may be considered material. In that sense my comments about percentages are wrong. But that’s not the case most people are complaining about.

    Holden: You’re arguing about two different points of law. Once you sign a contract, you’re expected to perform barring any exceptional circumstances. The contract says you must pay any increased fees unless they’re “materially” adverse. So if they increase the fee minimally, you’ve agreed to pay it, and Verizon can sue you for non-performance.

    But our case here is defining what constitutes a “material” increase. Since that term is undefined in the contract, you’d have to look at what the party’s likely understanding is. This is based on, e.g., how a reasonable person would understand the word, the dictionary definition, etc. (they also look at unequal bargaining power, but I really don’t know how heavily that’d be weighed).

    I’m simply saying, that in my experience, I don’t think a judge would consider a consumer “materially” affected by such a relatively small increase on a $50/month contract.

    I mean, of course I haven’t done ANY actual research on this specific case. I hope I’m wrong; I really do hate Verizon. Plus it sounds like they’re letting people cancel, based on Eightkid’s comments. I’m not sure if that’s based on legal reasons, or public relation reasons though.

  26. Barry1945 says:

    I am not sure that I have this right but my 4th grade math teacher taught me that 70 cents was an increase of 75% over 40 cents. Of course, this was many decades prior to the “New Math” era, (or should we say error?)

    Anyway, if a 75% increase doesn’t constitute a material change I’d like to be your doctor, lawyer, lawn care guy… fill in the blank and let me know if you’d still think it’s not a material change.

    We are billed by the minute or any part thereof. Meaning, we are not billed incrementally in 6 or 10 second periods. If you speak for 3, 2 or even 1 second over the minute, you are charged for the entire second minute.

    If you don’t think that adds up REAL QUICK, please see my request to be your, fill in the blanks from paragraph 2, above.

    Phew ! Thanks for letting me vent, and yes, I do feel a lot better now !

  27. Well, after reading through all these comments, my head is spinning a little bit less than it did before. It’s kind of sad that a company has to rely on a cancellation fee just to keep its customers. Isnt there a better way to keep people loyal? Maybe help them WANT to keep their contract?

  28. grouse says:

    Holden Caulfield: Perhaps. But without the ETFs it probably wouldn’t be economic to offer free/reduced-price handset deals. People would switch mobile networks every month to get a new phone.

  29. Rahnee says:

    @hang: Ive gone pre-paid before and went back to a contract because on pre-paid I kept loosing all those minutes I didn’t use. If your good about keeping up with minutes pre-paid may be the way to go. For me being suckered in to a 2yr contract was the way to go. Maybe they won’t make me bend over too far!

  30. Yuck says:

    I followed the advice given about getting out of contract early as per txt message rate hike. After 3 trys I got a lady that asked me how did the .05 increase caused adverse effect. I explained that It just did. I also told the 1st person that I talked with that this call was being recorded for my training as well. He never passed that Info along as the 2nd person I spoke with was flat out rude. Would not allow me to finish talking, etc. In short. I was able to get out without a ETF.

    Verizon went as far as to want to give me a free txt plan. When I refused the CS rep said that I could not leave as I already had a txt plan and was not paying per. When I asked him how long had I had the free plan he advised about a month now.

    I then asked, If this was already in affect, then why was I charged for 3 on my last bill ? At that point he knew he was caught. I was then moved to the next person and after telling her what just happen I was told I was able to get out without the ETF.

  31. contra says:

    A couple of posts above discuss the argument of whether or not the change is “material or not”. The customer agreement says “if these changes affect you in a material adverse way” or something close to that. It doesn’t refer to the actual change as being familiar – only whether or not that change “affects you in a material adverse way”. In that case, the argument is what “material adverse” means, not material change.

  32. Aubreyrose says:

    Worked for me. I called and used the 50% increase on texting and the increased administration fee for my reason. I told him that I could not change my contract any way wanted to so neither should they. I argued that it constitutes a material change to contract and under standard contract law, I was allowed to leave contract without penalty. a I told them it was bad business. After the customer service rep…She was kind of confrontational, I got the supervisor and it took a total of 3 minutes. Thanks for posting this site

  33. sovicki says:

    I just called and the customer service rep and the supervisor was telling me that the 30 cents increase in administration fee wasn’t consider adverse charge, and the text messaging was be consider adverse, however I have passed the 60 days deadline to cancel. She said the only thing she would do is to issue the credit for 30 cents until the end of my contract period ends. Anyone has any idea how I can get out of the contract without penalty?