Verizon Interprets "Materially Adverse" Differently From Reality So You Can't Cancel Without Termination Fee

Joseph would like to cancel his Verizon contract without early termination fee by arguing that the recent monthly administrative fee increase is materially adverse, but unfortunately for Joseph, Verizon’s lawyers have filled their customer service reps brains with a bunch of hooey about what materially adverse means. In fact, when Joseph was reading the very clause in the Verizon contract that allows him to what he wants, the call center supervisor laughed at him. According to his account, when he criticized the poor customer service, she started screaming at him. The text of Joe’s attempted EECB, inside…

Ladies and Gentlemen,

I would like to inform you of an issue I am having with your customer service department. Today, 5/7/08, I tried to contact customer service around 5 PM. Unfortunately, every time I was transferred to the department I requested, I received the message “We cannot process your call at this time. . .” and then was disconnected.

I finally reached customer retention nearly an hour later. Among my many calls, of note, I spoke with Stephanie (ext. 7476) and Trish (ext. 7129) at the Cranberry, PA call center. When I informed these CSR’s that I wanted my ETF waived due to the increase in the monthly administration fee being materially adverse, I was put on hold between 5-10 minutes EACH call, presumably so that the CSR could find a way to reject my request. (Although I want to close my account, I want to port my number to another carrier, so I cannot have my account closed before the number is ported).

Both calls escalated to the floor supervisor (once at my request, the other to “confirm that [she] could complete my request.” Both calls were escalated to Danielle (ext. 4075, also at Cranberry, PA). This “Danielle” denied my request to have my ETF waived. During the first call, she was relatively professional, granting my request for an escalation contact number/address. However, when I criticized the poor customer service, she began screaming at me. During the second call, she laughed at me when I read the following clause from the contract:

Our Rights to Make Changes

Your service is subject to our business policies, practices and procedures, which we can change without notice. UNLESS OTHERWISE PROHIBITED BY LAW, WE CAN ALSO CHANGE PRICES AND ANY OTHER CONDITIONS IN THIS AGREEMENT AT ANY TIME BY SENDING YOU WRITTEN NOTICE PRIOR TO THE BILLING PERIOD IN WHICH THE CHANGES WOULD GO INTO EFFECT. IF YOU CHOOSE TO USE YOUR SERVICE AFTER THAT POINT, YOU’RE ACCEPTING THE CHANGES. IF THE CHANGES HAVE A MATERIAL ADVERSE EFFECT ON YOU, HOWEVER, YOU CAN END THE AFFECTED SERVICE, WITHOUT ANY EARLY TERMINATION FEE, JUST BY CALLING US WITHIN 60 DAYS AFTER WE SEND NOTICE OF THE CHANGE.

She then said that the 15c per month charge wasn’t materially adverse. I explained to her that the phrase “material(ly) adverse” has no quantifiable limit; one definition is: “of such a nature that knowledge of the item would affect a person’s decision-making process.” In the canon of law, (any) price is considered as having this nature.

I am hoping that one of you fine people may be able to assist me with this issue. My account information is:

Name: Joseph XXXXX
Phone#: XXXXXXXXXX
Account#: XXXXXXXXXXXXX

Please contact me to discuss this further. I would greatly welcome an effort to restore my opinion of your company. Thank you for your time in consideration in getting this matter resolved.

Sincerely,

Joseph C. Tkocs

If the EECB doesn’t work out, Joe, you can also try some of these phone numbers.

Comments

Edit Your Comment

  1. weakdome says:

    $0.15 was pretty close to being Materially Adverse to a Horton’s cashier just a few minutes ago!

  2. WingZero987 says:

    This is so crazy that it’s hard to believe it’s true. Then again, I’m sure it is. Imagine how many people simply give up after being told “no” twice. That has to be tons of money saved, and what recourse does a person have if Verizon won’t follow their own contract?

    In the market for a phone myself, a few people have tried to convince me to go Verizon. After the whole 0.02 debacle and now this, fat chance. This latest act is simply disgusting.

  3. tcp100 says:

    Gee, this couldn’t have anything to do with numerous websites encouraging people to claim a wind direction shift to the northwest as being “materially adverse”, in order to get out of a contract you agreed to? Of course Verizon is cracking down and not being as lenient as they used to be.

    A fuzzy term like “materially adverse” is going to be open to interpretation under a “reasonable person” standard, if ever really tested at an extreme like this. Would any “reasonable person” say that fifteen cents a month on a cell phone contract is materially adverse?

    I hate to say this, but the answer is probably “no”, and they’re probably quite aware that you’re just trying to get out of your contract.

    It’s a buck eighty a year. A minute and forty-five seconds or so of minimum-wage work a month. Sorry, that is not materially adverse.

    I know the mode of the day is that anyone should and can be able to get out of a termination “FEe” with a little social engineering – but you did sign a contract, you know.

  4. WingZero987 says:

    @tcp100: All they had to do was charge NEW contracts the new fee, and old contracts the old fee. Verizon would have to employ chimps to miss that easy fix. They decided to charge everyone the new fee, understanding that this would happen. Sorry, thems the breaks.

  5. brettmeadors says:

    It seems with most Verizon call centers it is either hit or miss. I have always had more trouble when I am connected to one of the northern call centers, such as when I use my girlfriends phone to call. I never have any trouble out of any of the southern call centers, and it seems they have a little more wiggle room. I’ve received plenty of replacement devices and such from them with little trouble.

  6. tcp100 says:

    @WingZero987: You really think it’s “disgusting” that Verizon won’t let someone out of a contract over a $0.15 a month increase?

    Do you not understand that complaints like these are going to make it more difficult for people that have real material adverse changes, like when T-Mobile changed the overage charges for text messages?

    The idea behind this is that you can get out without penalty if the company does something lousy that changes the overall affordability or usability of a plan – not just a quick excuse to save yourself $200 because you want to break a contract.

    The former protects consumers from companies like Verizon; the latter just protects you from your own bad judgement.

  7. iEddie says:

    Check the title. :) (“FEe”)

  8. tcp100 says:

    @iEddie: It’s just Ben going into his native L33tsP3aK from his old haxor days.

  9. mac-phisto says:

    @tcp100: yes, the OP signed a contract that had certain provisions that were later changed. that’s the whole idea of “materially adverse”. perhaps the OP would not have signed the contract in the first place if this administration fee existed (perhaps he would) – the purpose of the clause is to allow the contract to remain in force w/ changes.

    the alternative is to not insert the clause (meaning that verizon would not be able to make changes while a person is in contract).

    it’s their choice, but they cannot have it both ways.

  10. backbroken says:

    To all those who think this shouldn’t be considered a “materially adverse” change to the contract: try notifying your service provider that you are changing the terms of your contract and reducing one of your fees by $.15 per month. Let us know what their response is.

  11. JustThatGuy3 says:

    This is actually a case where the Internet probably hurts you. Verizon does NOT want to set a precedent here, and get a flood of “I read it online, you did it for that guy!” calls.

    If it were just you, then they might make the “dealing with him is costing us more than the ETF, let’s just waive it and get him gone.” As it is, the math is more like “give in to him, and we’ll set a precedent for waiving hundreds, if not thousands of ETFs; we’re saying no and sticking to it.”

  12. rbf2000 says:

    @tcp100: The point is that it’s not fair for a company to make unilateral changes to a contract without giving the other party the option to exit the contract.

    In fact, the contract is not valid unless both parties agree to it. The Contract states that it is assumed that if the user continues using the service, they have agreed to the changes. That means if they don’t agree to the changes they must discontinue using the service. Charging an ETF for the only way to show that you don’t agree with a Contract modification seems to be immoral at best, illegal at worst.

    The term “materially adverse” is put in so that when a truly administrative change, such as fixing a typo, is instituted people will not be able to cancel – which is understandable. But other than internal administrative changes, it doesn’t matter how big or small the change is – nobody has the right to make you accept a Contract change.

  13. JustThatGuy3 says:

    @tcp100:

    Reasonable person standard FTW!

    There’s a reason it says “materially adverse,” not just “adverse.” There are certain changes that are so de minimus that they don’t affect the validity of the contract as a whole.

    Bottom line, if you can say with a straight face “if this provision had been in place when I became a customer, I wouldn’t have signed up,” that would meet a materiality standard. I very much doubt this does.

  14. BigElectricCat says:

    @tcp100: “You really think it’s “disgusting” that Verizon won’t let someone out of a contract over a $0.15 a month increase?”

    Yes. IMO, Joseph has a very good case here, and if Verizon lets it go to litigation, then their attorneys are quite clueless.

    Other posters are right. “Materially adverse” isn’t quantified in the contract. Had the contract stated that, for example, ‘any service or fee change resulting in an increase to Customer’s bill of less than $1 US shall not be considered materially adverse under this Agreement,’ then your argument would have some legs.

    But they didn’t, it doesn’t and that’s that.

  15. NightSteel says:

    @tcp100:

    The letter of the law is, any increase in the amount that the customer pays is a materially adverse change. Maybe $.15/month isn’t hugely adverse to a single person, but multiply it by a huge customer base, and Verizon gets perhaps millions of dollars extra per year. If you don’t give people an out for such changes, then Verizon has no reason not to keep doing it, raising the fees over and over again in small increments.

    Where’s the threshold? What would *you* consider materially adverse? Also, in the real world, when such definitions must be legally binding, who should be the one who determines what materially adverse is? A regulatory agency? Or do you think the cell phone companies should be *snort* self-regulating on such a thing?

  16. axiomatic says:

    @BigElectricCat: You sir are exactly correct.

  17. tcp100 says:

    @NightSteel: The letter of which law? This is hardly a simple, straightforwardly defined term:

    [law.fordham.edu]

    The threshold, as I mentioned, is the “reasonable person standard”. That is determined by a judge, and precedents are set that way.

    Until it goes to a court, then it’s going to be simply a disagreement between Verizon and the customer.

  18. tcp100 says:

    @NightSteel: No, I do not think the phone companies should self-regulate, but I do think issues like these will make it more difficult for people who have a truely damaging adverse change to get out of a contract.

  19. JustThatGuy3 says:

    @NightSteel:

    Could you please cite the letter of the law?

    As to who defines this, the short answer is, a court. If your definition and Verizon’s vary, then you can sue, and a court will decide.

  20. WhoMee says:

    I have never seen a company campaign so hard to become the “Worst Company of the Year”. When the time comes, I wonder if Ivan (Verizon CEO) will accept the award himself.

  21. blainer says:

    @NightSteel: Can you provide a cite for your claim that any adverse claim is necessarily material? I couldn’t disagree with you more.

  22. tcp100 says:

    @WhoMee: Don’t count out Comcast winning out with a surprise upset any day now.

  23. WingZero987 says:

    @tcp100: Repeat- They could charge old accounts the same fee and sign up new accounts with the new fee. WHICH PART OF THAT DO YOU NOT UNDERSTAND?

  24. blainer says:

    @BigElectricCat: Why do you think it makes a difference whether or not a change is quantified? The words ‘material’ and ‘adverse’ have specific legal definitions. Your seem to be claiming that the word ‘material’ should simply be ignored when reading the contract. I wonder, why do you think they added the qualifier ‘material’ at all?

  25. fostina1 says:

    .15 on a 2 year contract is about a gallon of gas these days. that extra gallon of gas could keep me from walking.

  26. Jmatthew says:

    So let’s say they can change the policy by .15 and have it not considered material adverse.

    How often can they do this?

    Every month?
    Every day?

    Hey, it’s only 15 cents…

  27. NightSteel says:

    @tcp100:

    Pardon me, the letter of the contract, which is legally binding. BigElectricCat is right, the contract as written does not use the reasonable person standard, so until Verizon starts writing their contracts that way, they are stuck being legally obligated to let people out over fee increases, no matter how small.

    Now, as for the reasonable person standard, I would have to say that suggesting it in such a case is idealistic to a fault. Invoking it would only give Verizon even more power than they already have in such a contract, because people would now have to go to court to get out of their contracts, no matter how large the change is.

    Do you really think that if such a standard were used, Verizon would define *any* materially adverse change as ‘reasonable’? Of course not. They would force their unhappy subscriber to go to court over it, which would be a double whammy; it ties up the courts, AND it would be more expensive than just paying the ETF, so nobody would do it. It would take a class action, which would of course be settled without legal precedent, so future customers would still be screwed.

    And you know that Verizon would fight tooth and nail to avoid class actions and get the court to accept its definition of reasonable, and appeal every decision that didn’t go its way.

    If this were a contract between two equal parties, then the reasonable person standard might be a good idea. But in the case of a giant service provider with deep pockets vs. individual subscribers, I can’t see how it possibly could be.

  28. EyeHeartPie says:

    What I don’t get is why is Verizon allowed to change a contract without the consent of the other party? Can I change my contract with Verizon because I think I am paying too much for phone service?

    For example, take two scenarios:
    (1) Verizon says that they need to charge more money for administering your service and changes the contract to reflect this.
    (2) You state the cell service you are getting is not worth the $45 you are paying, and so you are changing your monthly payments to $40, and you change the contract to reflect this.

    Why can Verizon change the contract without your consent, but you can’t without theirs?

    What I would love to see is someone rewrite their contract to say they are now paying $40 instead of $45 (writing in a clause that says if no reply is received from Verizon within 3 weeks then the contract becomes valid starting the next billing cycle), and then send the contract to Verizon (via a kiosk in a mall). I wonder if that would fly…

  29. savvy9999 says:

    I guess it depends upon which definition of “materially” one (a judge) would consider.

    If materially = “more than a little, significant”, then a 15 cent change in the contract does not pass muster

    If materially = “existing in the physical world”, which 15 cents does– you can certainly hold it in your hand– then the ETF should be granted.

    So, as usual, contract language is carefully worded to be vague so that it can be argued to benefit one side no matter what.

  30. NightSteel says:

    @blainer:

    I have to admit that I don’t know the legal definition of a materially adverse change. If someone could find it for all of us, that might help. However, my understanding of it is, a change that results in actual negative effects for the customer, no matter how small.

    rbf2000 said it best: The term “materially adverse” is put in so that when a truly administrative change, such as fixing a typo, is instituted people will not be able to cancel – which is understandable. But other than internal administrative changes, it doesn’t matter how big or small the change is – nobody has the right to make you accept a Contract change.

  31. MayorBee says:

    @JustThatGuy3:

    There’s a reason it says “materially adverse,” not just “adverse.” There are certain changes that are so de minimus that they don’t affect the validity of the contract as a whole.

    If it’s such a little deal, why is Verizon instituting it in the first place? Obviously the $.15 per line/account is material to them. And, as has been pointed out, the contract does not state what is material and what is not material.

  32. WhoMee says:

    Since this is a small amount, could a person go to small claims court and get the money back and have the contract voided? Could Verizon force you into arbitration (I believe it is in the contract)?

  33. pigeonpenelope says:

    Not that I’m a fan of Verizon however I was a Verizon customer for 3 years. They’re customer service isn’t perfect, however they work hard on having good service and I doubt they were as bad as he said.

    “when I criticized the poor customer service, she began screaming at me.” doubt that. seriously doubt that.

    I think this is a case of a guy who wanted to get his way because he thought he was right and when he was told he wasn’t, he got ugly.

  34. SoSeksi says:

    I think looking at this in absolute terms is a mistake. Verizon was charging him an admistrative fee of 70 cents, not for any specific service, but just as part of ongoing costs to maintaining a subscription with this provider.

    By raising it to 85 cents,, the increase is a 21% jump is what Verizon is charging for this “service.” I have a hard time seeing how a 21% jump in price does not qualify as material.

  35. KyleOrton says:

    Does anyone recall the story of a clever man petitioning a king? If I remember correctly, he asked for 1 grain of rice for the first square on a chessboard, 2 for the second, 4 for the third and on and on until he had a butt load of rice.

    In the same way Verizon doesn’t want to set a precedent for getting out of the ETF, the consumers shouldn’t allow them to set a precedent of allowing seemingly minor contract changes and charge increases. In my opinion (based on common sense, not law) the official position that $.15 isn’t materially adverse is an interpretation that is ABSOLUTELY materially adverse.

  36. midwestkel says:

    You blocked out his last name once but did not block it out at the end.

  37. nonzenze says:

    “And, as has been pointed out, the contract does not state what is material and what is not material.”

    They don’t have to. Words like that have a fairly well defined legal meaning — including a threshold underneath which a change just does not qualify.

  38. blainer says:

    @NightSteel: I would consider rbf2000 to be describing either a ministerial or administrative change. The key in the contract definition is that it uses the term [i]adverse[/i]. How could a mere administrative change be adverse to a party?

    The definition of material isn’t as difficult as the non-lawyers on this board are making it out to be. It simply means, as shown in a earlier post, “of such a nature that knowledge of the item would affect a person’s decision-making process.” The notion that it involves the first Black’s definition regarding matter is ridiculous.

    rfb2000 is also incorrect when he states, “But other than internal administrative changes, it doesn’t matter how big or small the change is – nobody has the right to make you accept a Contract change.” If the contract says that you have to accept a contract change, and I believe that this one does, then you have to accept a contract change.

  39. pigeonpenelope says:

    @WhoMee: yeah, likely he is to abide by the “mandatory arbitration” agreement. Many cell phone companies have you agree to that before you get service.

    [en.wikipedia.org]
    i’m still working on submitting working links so if this doesn’t work when you click on it just copy/paste… anyway, this is the wikipedia version of material adverse change in case people want to review

  40. jtheletter says:

    If 15c is not “materially adverse” then what’s to stop them from simply increasing the fee by this amount every month forever? I’m reminded of the Family Guy where Quagmire flips out over Peter tapping his golf ball and not counting it as a stroke. Quagmire then “accidentally taps” his ball 10 times into the hole. I think we all agree that’s not a hole in one.
    If Verizon doesn’t have a dollar value defined in the contract then we must go with available definitions of ‘materially adverse’ which do not have a minimum dollar value.

  41. VereErmoo says:

    Comment on Verizon Interprets “Materially Adverse” Differently From Reality So You Can’t Cancel Without Termination Fee
    “materially adverse” essentially means that had one known about this in
    the first place, it would have affected their decision to purchase
    said/service or good. given that other networks charge lower
    administrative fees than Verizon, then as a rational self-interested
    utility maximizing consumer, I would choose to go with the network that
    offers the lowest rates, with everything else being equal. Pretty much
    all of the networks sell the same handsets and offer roughly the same
    service set, so yes, it is materially adverse.

    I had to argue with them for an hour before they relented; i was hung up
    on by supervisors, told in no uncertain terms that the particular clause
    i was referring to DID NOT apply to administrative charges, etc, etc.
    Verizon even had the cheek to try to school me by actually referring me
    to the same clause i was using and claiming it as their defense as to
    why i couldn’t cancel; the irony. i was of course offered compensation
    for the increased charge, and a particularly rude supervisor asked me
    what difference does it make, why don’t you just accept the credit and
    then there is no materially adverse situation as you are no worse off
    than before. my response: i caught you guys with your hand in the
    cookie jar, you would never have called me to offer the credit, i had to
    ask for it. that indicates that were i not an informed consumer, you
    would have been more than happy to stick it to me…so i’m sticking it
    to you.

    VZW, stop treating customers like dumb cash cows.

  42. blainer says:

    @MayorBee: Per the contract: “IF THE CHANGES HAVE A MATERIAL ADVERSE EFFECT ON YOU.” Whether it is material or not to the company is irrelevant.

  43. pigeonpenelope says:

    @KyleOrton: how much is a buttload?

  44. JustThatGuy3 says:

    @NightSteel:

    “I have to admit that I don’t know the legal definition of a materially adverse change. If someone could find it for all of us, that might help. However, my understanding of it is, a change that results in actual negative effects for the customer, no matter how small.”

    The very fact that the word “materially” is in there means that your definition (any effect, no matter how small), is by definition incorrect. Materially is a _limitation_ on adverse, is means that not all adverse changes qualify.

    For example, if Verizon added a clause saying that persons who magically grow to 100 feet tall, turn green, and sprout wings, must pay $9 extra per month. That wouldn’t be material provision, since the clause would never impact anyone.

    As to the reasonable person standard, that’s how a lot of contract disputes get resolved. Even extremely well-drafted contracts have elements that are slightly ambiguous, and the reasonable person standard is a key elements that courts use to resolve disputes over what the contract actually requires. For example, if you have a provision half way through a contract between Bob and Joe that says “Bob will pay Joe $44/month,” and then Bob makes the claim that, for that clause only, “Bob” refers to some _other_ guy named Bob, it’s highly unlikely a reasonable person would agree with him.

    At the end of the day, again, contract disputes are resolved by courts. That’s what they’re there for. I maintain that, if you actually took this to trial, the charge would not be deemed as materially adverse. That being said, we will never know unless someone actually does sue over it.

  45. NightSteel says:

    Argh, this morning just is not a good one for my brain.

    I previously said: BigElectricCat is right, the contract as written does not use the reasonable person standard, so until Verizon starts writing their contracts that way, they are stuck being legally obligated to let people out over fee increases, no matter how small.

    That should be:

    BigElectricCat is right, the contract as written does not define a specific threshold or standard of ‘materially adverse’. Thus, the simplest definition of it *should* be the one used. With the caveat that IANAL, I think rbf2000’s interpretation is the right one.

    Also, the contract as written does not use a reasonable person standard, so regardless of that idea’s merit, it does not apply in the existing case.

    Therefore, given that the contract does not define a threshold or standard of ‘materially adverse’, any increase in rates, fees or any other charges levied by Verizon is materially adverse.

  46. blainer says:

    @jtheletter: So what if they don’t have a minimum dollar value definition. The ‘definitions,’ as you put it, also don’t assign a maximum dollar value. So what?

  47. pigeonpenelope says:

    its not that .15 cents is a lot of money. but when it is .15 cents for one text message, then it is a lot of money as they add up. when it comes to a teenager, that .15 cents per text message can be a dangerous thing on a bill. 100 text messages would go from 10 dollars to 15 dollars. considering I’ve seen bills of teens who do 40,000 text messages, that extra few cents makes a very big deal.

  48. NightSteel says:

    @JustThatGuy3: The very fact that the word “materially” is in there means that your definition (any effect, no matter how small), is by definition incorrect. Materially is a _limitation_ on adverse, is means that not all adverse changes qualify.

    Okay, so what’s the right definition?

  49. Gokuhouse says:

    Materially adverse is the same whether it’s 1 penny or 1000 pennies. I don’t see why there’s a debate over this at all. If I signed up for a contract and knew that it was saving me a few bucks throughout the year over another company and then all of a sudden they upped the price on me and now the other company is cheaper, I’d be mad too. Money is money.

  50. EyeHeartPie says:

    @JustThatGuy3:
    “For example, if Verizon added a clause saying that persons who magically grow to 100 feet tall, turn green, and sprout wings, must pay $9 extra per month. That wouldn’t be material provision, since the clause would never impact anyone.”

    You’re obviously unaware of the cross-cloning of the Hulk, Angel, and Galactus the government is currently working on.

  51. jtheletter says:

    @blainer: So what? It means that ANY value fits the definition. Whether it is 1c or $14,000. If there is no value defined then any value other than 0 meets the definition. (zero would not meet the definition of ‘material’)

  52. NightSteel says:

    @blainer: So what if they don’t have a minimum dollar value definition. The ‘definitions,’ as you put it, also don’t assign a maximum dollar value. So what?

    This argument is a fallacy. Let’s think about this, shall we? “You may get out of your contract without ETF if we make materially adverse changes to it. For the purposes of this contract, materially adverse means ‘between 20c/month and 30c/month’.”

    Putting a maximum amount on ‘materially adverse’ is, frankly, ridiculous. I can’t imagine that such a contract clause would be held legally binding by anyone. “They signed the contract, Your Honor! We raised the fees 35c/month, which they agreed to!” Man, would it take a terrible judge to sign off on THAT.

  53. eben56 says:

    To those that say this is not “materially adverse”…. It is a change to the contract. What if I tell Verizon that I am going to start paying .15 less each month. After all it is not materially adverse so I should have the right to change it.
    What if they raise it .15 this month and then .15 next month, and .15 the month after that? When does it become materially adverse to the corporate shills that post all the “blame the OP posts”
    My phone company is Fairpoint Comm. Who just bought all of Verizon’s land lines in ME, NH, and VT.
    The PUCs of each state approved the sale as it would “improve customer service and DSL availablilty at a lower cost than available now”.

  54. JustThatGuy3 says:

    @eben56:

    It becomes “materially adverse” when I decide it does. If you disagree, we settle it in court.

    As to your ability to pay $0.15/month less, sorry, but the contract gives Verizon the right to change the contract, not you. You could argue that the provision was unconscionable, but again, you need a court to decide that.

  55. JustThatGuy3 says:

    @NightSteel:

    I’d define materiality in this case as “enough that, if this had been in the contract from the beginning, I wouldn’t have signed up.”

    That being said, at the end of the day, materiality is what a court says it is. That’s true of all laws and contracts.

  56. dragonvpm says:

    @JustThatGuy3: and that sort of contract has often been construed as “unconscionable”

    A proper contract is supposed to be one where 2 parties agree on certain terms and conditions by which goods and/or services will be exchanged (often) for money.

    Here’s a question. Would it be ok if the change was +$0.15/month applied once every other year? Once a year? once a month? once a day (which would add $54.75 to your monthly bill by the end of one year)?

    Without the prohibition against “unconscionable” contracts, the “materially adverse” clause could be reworked and Verizon could just skirt whatever arbitrary limit they imposed ($1.00 / month say) and you couldn’t do anything about it.

    Fortunately, contract law doesn’t work that way and Verizon should know better. I suspect they’re doing this largely to discourage the people who will take a give up after hearing no a few times.

  57. NightSteel says:

    @JustThatGuy3: Then I hope that the first time this goes to court, Verizon gets the smack down. Otherwise, anyone with a ‘materially adverse change’ clause in a contract with a big corporation with deep pockets will be doomed to court hell, as I posted before.

  58. mike says:

    Contract law is key here. Let’s take a scenario outside cell phones.

    Most people today are a part of a home-owners association. In order to move into the neighborhood, you have to agree to their rules and conditions. If you agree to the rules, if you break them, even if it’s “reasonable”, the court will rule against you because you agreed to the rules.

    If the rules say no wind mills, you can’t put up a wind mill, even if its 2-inches tall.

    Since Verizon doesn’t specify what Materially Adverse means, we must assume the letter of the law. In this case, Materially Adverse is what the other side considers. If Verizon changed the price to be one-cent higher, then you still can be materially adversed by this.

    Verizon doesn’t know your financial situation; they don’t need to know. Since there is no statute in the contract that says “material adverse is 1% above your contract price” or the like, then it’s down to the least common denominator.

    I agree; $0.14 is not a lot a month. But that’s not the point. The point is that verizon is changing the terms of the contract. Taking back the home-owners association analogy, if the HOA decided to allow you to have a windmill, you *STILL* have to agree to the new change and the HOA must give you the right to object.

    (I realize that this isn’t a perfect analogy since most HOA contract include changes to the rules and you’re still bound to them.)

  59. tcp100 says:

    @WingZero987: Testy much? Jesus.

    Yeah, they “could”, but they didn’t, and maybe there was a reason that they did not – billing systems or whatever it may be.

    My argument wasn’t about what they could or couldn’t do as far as their billing systems was concerned, so I understand you clearly – no reason to get juvenile about it.

    JustThatGuy3 has it right, though, we can argue what’s materially adverse to you and me forever – but in the end it’s up to a judge, and if Verizon doesn’t budge, that’s your only recourse.

    You can go ahead and sue over a 15 cent increase – I’m saying I’m going to guess that most people won’t, and if that is truly the ONLY THING making you want to leave the contract (if the OP was being honest, then a remedy to the fee would be an acceptable recourse) then this person is “abusing the system” a bit.

    The “15 cents more every month” argument is not the same, either. There’s clearly a difference between a single, one time change and a pattern of repeated ones. A series of immaterial changes can definitely add up to a material change.

  60. cef21 says:

    To all those changing that the 15 cent change in price is immaterial, at what point does it become material? $1.00? If so, can Verizon get around it by changing the price 7 times, 15 cents each time? Do you have to wait for them to make the 7th change?

    In reality, any change to the price term is considered material because it changes the obligations of the parties.

    Black’s law dictionary includes the price as a material term of a contract, and notes that a “Material Alteration” to an instrument is “an act done to an instrument after its execution, whereby its meaning or language is changed.”

    There are very few immaterial changes to contracts. If the change is immaterial, why make it?

  61. dragonvpm says:

    @sohmc: You left out an important caveat that most contracts implicitly acknowledge.

    Not everything in a contract is necessarily legal. This is why they have severability clauses (i.e. “if any part of this contract is found to be unenforceable the rest of it remains valid”). So you could agree to certain rules and those rules could later be found to be unenforceable regardless of what the contract said.

    Furthermore there has to be a meeting of the minds “e.g. I pay you $x for y and you give me y, not z which is a lot like y, but not exactly like it”. Once you decide that you want $x+$0.15 (for instance) I have the right to decide that this contract is no longer in my best interest. Maybe your competition will only charge me $x+$0.05 or heck maybe they charge $x-$1.00 for z and I decide that this is more in line with what I want.

    Even if you give yourself the unilateral option to make specific changes to the contract, I still have the option to back out of the contract if those changes don’t suite me. That is basic contract law.

  62. flamincheney says:

    You would think that after VZW worked out the administrative costs of constipating their customer service employees with trivial matters of semantics that it would be fiscally more intelligent to bite the pro-rated $175 ETF. Then if said customer decides down the road he wants back into the VZW fold force him/her to pay a deposit.

    On the other side, couldn’t the customer gain any headway through the AG’s office or FCC?

    Regardless predatory contract laws in this country should be strengthened. How can you ask the populace to continue supporting an economy that gives nothing back? They just take, take, take and we are all supposed to just sit there and take the lashings.

  63. tcp100 says:

    @cef21: Ok, but what I’m saying is that the OP really isn’t griping about the change in price, and I think we all know that. He made that clear to Verizon, which put him clearly in the “trying to weasel out of the contract” camp in Verizon’s eyes, which makes them more and more suspicious of anyone who tries this.

    Do you think that he wouldn’t be porting his number and cancelling if Verizon said “Fine, we’ve credited you with the cost of the admin fee for the rest of the contract; hence, you will not be charged.”

    That might legally remedy the breach, and I’m not sure how a remedy like that works in contract law – or if once that milestone has been passed, it’s over.

    He probably hurt himself by griping about hold times and other things – he’d have much more of a leg to stand on if his ONLY complaint was the fee change. (I’ve seen this a lot – people like to muddy the water in complaints by adding details like “AND I had to hold for a really really long time!”, as if that’ll help. It won’t. They don’t feel sorry for you. They won’t feel sorry for you. Stick to the issue at hand.)

    His only remedy, if Verizon doesn’t give in, is to sue.

  64. flamincheney says:

    if you are locked into arbitration how ever you will never be able to present anything to a judge. You are just screwed, and most likely your credit is too.

  65. henwy says:

    I always thought the easiest way to figure out if it’s materially adverse is to ask people if they would be satisfied with the crediting of the fee and no longer wanted out without paying the ETF. In this case, if the company offered you a 15 cent credit would you then no longer want to terminate your contract if you could duck the ETF.

    It’s sort of the same idea of determining if a lawsuit award is reasonable or not. If bunches of people are thinking, that lucky bastard I wish I could have had that (whatever adverse event) happen to me if I could have gotten that amount, it’s probably too much.

  66. Scuba Steve says:

    Unfortunately the lawyers/judges get to decide what ultimately ‘materially adverse’ means.

    I personally think that any change to the contract, whether it be in price or services offer, is one that should null and void the contract.

    Imagine if you started paying 15 cents less a month every time. How quick do you think your service would be cut off?

    Pretty damn quick.

  67. tcp100 says:

    Still, the lesson remains.. How NOT to win your way with customer service:

    “This “Danielle” denied my request to have my ETF waived. During the first call, she was relatively professional, granting my request for an escalation contact number/address. However, when I criticized the poor customer service, she began screaming at me. During the second call, she laughed at me”

    Protip: Save your complaints about customer service until you’re done dealing with them. “Hey, why won’t you help me out, oh, and BTW you suck” will get you nowhere.

  68. TKOtheKDR says:

    @pigeonpenelope

    “when I criticized the poor customer service, she began screaming at me.” doubt that. seriously doubt that.

    I think this is a case of a guy who wanted to get his way because he thought he was right and when he was told he wasn’t, he got ugly

    I am Joseph T., the submitter. Please let me assure you that as an avid consumerist reader and a soon to be law school student, I was in every way professional. Yes, Danielle definitely did yell and laugh at me. If anyone has any questions on this incident, I would gladly answer them to the best of my ability.

  69. blainer says:

    @sohmc: “Since Verizon doesn’t specify what Materially Adverse means, we must assume the letter of the law. In this case, Materially Adverse is what the other side considers. If Verizon changed the price to be one-cent higher, then you still can be materially adversed by this.”
    What? The words material and adverse have standard legal defintions as have been noted in this thread. If you want to claim that something that has no NUMERICAL definition can be defined unilaterally by the adverse party, then you need to provide a cite for this.

  70. blainer says:

    @dragonvpm: “Even if you give yourself the unilateral option to make specific changes to the contract, I still have the option to back out of the contract if those changes don’t suite me. That is basic contract law.”
    You are exactly correct. Here, however, the contract states that Verizon is entitled to the right to make changes to the contract that are not materially adverse to the counter-party. The counter party does not, as you state, have the right to back out if the changes don’t suit him or her. the counter party ONLY has the right to back out if those changes are materially adverse.

  71. Fivetop says:

    Tell them your definition of materially adverse is giving an extra $90 million a year to a company that donates so much money to Senator Jay Rockefeller and many other politicians willing to allow Verizon to spy on their subscribers.

  72. pigeonpenelope says:

    @tcp100: quite right. the best thing to say is “i think verizon is great and i love their customer service but today i am unhappy because….” that goes a long way.

  73. BigElectricCat says:

    @tcp100: “The threshold, as I mentioned, is the “reasonable person standard”. That is determined by a judge, and precedents are set that way.”

    I don’t see that in your Fordham link, but on page 20, I do see something that echoes my comment above; the actual *establishment* of what constitutes “materially adverse” in the wording of the contract.

    Also, I don’t have time to read the whole thing, but so far, that Fordham link doesn’t appear to address business-consumer issues. It appears more aimed at business-business issues. Can you please point me to the pages on which the ‘reasonable person’ standard is discussed?

  74. BigElectricCat says:

    @blainer: “Why do you think it makes a difference whether or not a change is quantified?”

    Because it eliminates ambiguity. Such specificity would do away with complaints of this nature.

    @blainer: “The words ‘material’ and ‘adverse’ have specific legal definitions. Your seem to be claiming that the word ‘material’ should simply be ignored when reading the contract. I wonder, why do you think they added the qualifier ‘material’ at all?”

    “Material” is also ambiguous. Why not be specific and establish a level that both parties know from the outset, so that litigation can be avoided?

  75. dragonvpm says:

    @blainer: My apologies, I thought it was implied that for the most part something that doesn’t suit the counter-party would most likely be “materially adverse” changes. I doubt most people care where they mail in their payments or what the customer service number is (iirc those bits of information are in the contract).

    Although, to be honest, I wonder if that clause is enforceable in court. Courts are pretty good about not addressing issues until they are specifically brought up, so if no one has ever fought to cancel their account w/o an ETF because the contract was changed in their favor then it might be one of those severable clauses.

    That was part my earlier point. Just because it’s in writing, in a contract doesn’t make it legal or enforceable.

  76. TheBigLewinski says:

    Lady, give me your address, I will send you the $.15. Let’s get real, we have someone who just wants out without an ETF and is trying to use the 15 cents as the reason.

  77. tcp100 says:

    @BigElectricCat: Page 16 says:


    “The middle ground is represented by the formulation would [or would not] reasonably be expected to result in a MAC, meaning that a reasonable person would (or would not, as applicable) expect the one or more items in question to result in a MAC. In this context, expect is best thought of as meaning “regard (something) as likely to happen,”with likely, in turn, meaning “a degree of probability greater than five on a scale of one to ten.” In all but the most exceptional contexts, this would be the appropriate formulation to use”

    Obtuse, but I think it’s implied. I’m not sure what bearing the b2c vs b2b has on it?

  78. tcp100 says:

    @tcp100: Hmm, I think that may be more talking about the word “would” than “reasonable”. I love lawyers. Here’s a better part from Page 21:

    Here is the recommended form of a basic version of the definition: “Material Adverse Change” means any material adverse change in the business, results of operations, assets, liabilities, or financial condition of the Seller, as determined from the perspective of a reasonable personin the Buyer’s position.

  79. blainer says:

    @BigElectricCat: Goodness, I hope you’re wrong. If the concept of materiality is ambiguous, the every shareholder action, modification of a contract or SEC action is null and void!

  80. NightSteel says:

    @tcp100: I’m not sure what bearing the b2c vs b2b has on it?

    BigElectricCat’s point is at least related to one that I made. Contracts are supposed to be a meeting of the minds, between two more or less equal parties. In this case, Verizon has the money and lawyers to throw away on litigation for years until they get the precedent they want. The average customer does not.

    Your arguments seem very close to those of free market fanboys, except instead of ‘the market will correct itself’, you say ‘the courts will correct the market’. That’s all well and good, except your arguments make a very big (and unrealistic, in my opinion) assumption: That Verizon will act ethically.

    Do you honestly believe that putting more power in Verizon’s hands in such a contract dispute is wise? Do you really think that Verizon would not do everything they could to contest and draw out such cases until their opponents gave up, regardless of the validity of the consumer’s complaint? Most people don’t have the resources for lengthy court battles, nor would they want to have one when just paying the ETF would be cheaper.

    If you allow Verizon to decide, or leave it to the courts to decide what ‘materially adverse’ means on a case-by-case basis, then the materially adverse change clause is meaningless, because consumers will NEVER get out of an ETF. Verizon will force it into the courts every time, where the odds are stacked in their favor by simple virtue of their deep pockets. I don’t see how thinking otherwise could be anything but naive.

  81. JustThatGuy3 says:

    @NightSteel:

    If they went to court, a judge or jury would decide whether a reasonable person would regard $0.15/month as material, to the degree that it would affect their purchase decision.

    Let’s also remember that the OP has specifically said that he DOESN’T view the charge as material – he’s not switching because of the charge, he’s trying to use the charge as a pretext to do something he wanted to do anyway (leave).

    If he really was leaving because of the charge (i.e. trying to use the clause the way it was clearly intended), then he’d stay if they offered to give him a one-time credit of $3.60 (two years of the surcharge, which would cover him through the end of his contract, even if he signed up yesterday).

  82. dragonfire81 says:

    At my call center we were directed to try and BS as best an explanation of “Materially adverse” as we could, since no clear definition is provided in the contract.

    The hope was we could come up with a plausible enough definition that the customers (most of which knew diddly about contract law) would believe us and accept that whatever change or minor fee increase we were implementing was NOT a materially adverse change.

    Most customers are not educated enough to realize the opportunities available to them to cancel without ETF and companies take advantage of that.

  83. JustThatGuy3 says:

    @NightSteel:

    It’s not an issue of what the situation _should_ be, it’s an issue of what the situation _is_. Bottom line, if the OP says “this is materially adverse,” and Verizon says “no its not,” and charges you an ETF. You can then either (a) pay, (b) sue, or (c) take a hit to your credit report.

  84. BrianH says:

    Woweee woooo wah. Them’s a lot of comments.

    The damn phone companies should just stop subsidizing the phones, and de-couple the phone from the contract. (In other words, not *require* a contract. When I was a product manager at Motorola Infrastructure, we were working with a company that was contemplating offering 2 monthly rates, one month-to-month and one for a 2 year contract. It can be made to work.)

    Deliver good service at a reasonable price, and you (Sprint/Verizon/AT&T) won’t have so much trouble….

  85. ludwigk says:

    @pigeonpenelope: Well, 1 + 2 + 4 + 8 + 2^4… 2^63 for a chess board (the sequence started with 2^0).

    The last term alone is 9.22 x 10^18 grains. At about .02 g/grain of rice, that’s about 184,467,440,740,000 kg of rice, or more than you can deal with.

  86. tcp100 says:

    @NightSteel: Wait, wait.. I’m not saying that it’s fair or right. I’m just saying that’s how it is.

    I’m not saying here what I think SHOULD be. (Although in this case, honestly, I don’t think a fifteen cent charge warrants refund of the subsidy of your phone equipment, which is what an ETF amounts to – I could go on for hours though on what I think should be in cell contracts; one thing for sure should be a coverage clause along with a truth in disclosure of all fees.)

    I don’t think Verizon will act ethically, I don’t think what Verizon does is usually right. I just know that they will, in this case, probably win.

    My argument overall is that by starting these battles over such petty things as fifteen cents (and the OP’s attitude towards the CSRs did not help) you are going to be making Verizon less and less amicable to contract termination without fee than they already are.

  87. elmuchachos says:

    keep fighting the good fight, it took me 20 something calls and 3 weeks to get out of my ATT contract(cingular at the time) 2 years ago. There was a breach of contract and thru the help of howardforums, i broke free from shawshank!

  88. mrlogical says:

    But if $0.15 isn’t material then what is? What if it were $0.16? What if it were $0.86? What if they did it every month? What if they did it every Thursday? What if it was material to one person but not another? Good god, and to think I was just feeling jealous of all my friends who are still in law school, because I forgot how incredibly tedious it could be to hear people talk past each other arguing about some trivial bullshit and trying to sound smart.

    And by the way, $0.15 is totally not materially adverse, this guy can sue if he wants but he’ll lose, and yes, it might be different if they changed it by a different amount or did it more often, but then we’d be discussing a different EECB, wouldn’t we?

  89. tcp100 says:

    @BrianH: Sprint tried this.

    When Sprint PCS started out, they had no contract, and you paid full price (~$300) for the phone.

    It didn’t work for long, because people, simple as they are, would rather get the phone for “free” and submit to a 1 year (then later 2 year) contract.

    Honestly, when I buy a cell phone, I ask the ETF fee. I figure that into my costs and the chance that I’ll cancel.

    I bought a Sprint broadband card last week – and they have a $175 ETF. The card itself was only $29. I realize that if I cancel, that’s a $204 card I paid for, which is probably close to what it really costs. If I stick through the contract, my “rebate vests”, and there’s a “break even point” where the time left in the contract = the ETF, so it wouldn’t matter if I canceled at this point.

    There seems to be an attitude as of late that there’s a “right” to get out of an ETF when you sign a contract. This seems to be a new concept, but there really isn’t.

    Most cell companies will still sell you an unsubsidized phone with no contract, you know. But take a wild guess how much the price difference on the phone will be? If you said “About the cost of the ETF”, you’re right.

  90. dragonvpm says:

    @tcp100: It’s not a right to get out of a contract, it’s the right to “play” the game just as much as the companies do.

    Why do the wireles companies tie their service to specific phoneS? Why can’t I just buy the best phone (for me) out there and use the best service provider i want (e.g. what I do for cable TV or internet service)? Why do they have an early termination fee in the first place? Wouldn’t the best way to win and retain customers be to just have the best prices and best quality of service?

    I don’t happen to feel that it’s worth my time to get out of a contract just to jump over to someone who is (IMO) just a little bit better (or sometimes just different) than my current provider, but if these companies spend so much time writing contracts which sometimes border on abusive then I don’t think they should be crying when their vict… err customers use those same contracts to save themselves as much money as they can.

  91. jfischer says:

    It matters not one bit how small the adverse change might be, the definition of “Materially Adverse” in a contract drafting sense would be “ANY material adverse change in the business, result of operations, assets, or financial condition of the Seller, as determined from the perspective of a reasonable person in the Buyer’s position”. (Source: “A Manual of Style for Contract Drafting” By Kenneth A. Adams, American Bar Association)

    Books on contracts spend entire chapters on this simple concept, so there is no excuse for Verizon to attempt to dismiss that the amount of money is the basis for failing a “test of reasonablness”.

    The easy test of “reasonableness” is to ask if Version would accept payments that were consistently 15 cents lower than the amount billed as “payment in full” for that billing period.

  92. thefncrow says:

    @tcp100: The issue about continually changing the contract is applicable.

    Consider the following. You claim that a $0.15 increase in fees is not materially adverse. So, Verizon raises the fee by 0.15 this month, and now your contract includes that $0.15 increase, as you agreed to the change(by not cancelling your service).

    Next month, Verizon institutes another $0.15 increase. Total change in your contract from what you signed is $0.30, but since your contract changed in-between, the actual change is $0.15, and that’s not materially adverse.

    If Verizon does this for 12 consecutive months, they will have changed the original contract by a total amount of $1.80 a month and raised the amount you owed them by $10.50 for the year, but has done so by avoiding making a materially adverse change to your contract, even if you were to consider a fee hike of $1.80 to actually be materially adverse.

    When the fees go up, your contract is modified. When the next change occurs, the baseline is your current contract, and not the initial contract. If you take them to court claiming an adverse effect due to the repeated bill increases, Verizon will pull your next-to-most-recent contract and show that the difference between the contract you agreed to and the new addition is a difference of $0.15 per month, and the question before the court will be whether the $0.15 increase is a materially adverse effect. Your claim is that, no, it isn’t, and thus, the fact that Verizon has raised their rates each month and caused a cumulative change of $1.80 is irrelevant, because the change from the contract you agreed to isn’t $1.80, it’s $0.15.

    A series of changes which are not materially adverse cannot become a materially adverse change, because you’ve agreed to the change at each stop along the way, and the only change you can dispute, the current one, is, by definition, not materially adverse.

    Thus, it is better to accept the definition commonly argued here that it is any material change(a change in fee, etc, as opposed to correcting a typo or something) in order to avoid the death by 1000 paper cuts.

  93. tmlfan81 says:

    I hope one of these cases goes to litigation, and Verizon wins. I hope it does set a precedent that tells consumers to find a more legitimate, less tacky way of getting out of their contracts without a term fee.

    I’ve got a marvelous idea – why don’t you actually show them where they aren’t providing you with top notch service on a consistent basis after numerous call-ins, plan changes, and the like.

    Seriously demonstrate where they have fallen down, not where they’ve added a $1.00 or two to your annual wireless spending. This is fucking pointless to argue, though. People would much rather have an easy out in life than to be committed to anything.

  94. blainer says:

    @jfischer: You need to read your cite again. You are pretending that the word material doesn’t exist. It does not read “Any adverse change,” it reads “Any MATERIAL adverse change.” You still need the adverse change to be material, so your claim that “It matters not one bit how small the adverse change might be” is demonstrably false.

    Additionally, your determination of materiality based upon what Verizon would do is fatally flawed. The contract does not allow the counter-party to make ANY changes to the contract, material, adverse, both or otherwise. If it did, then you would be right, but the contract vests this power in the company, so your argument is specious.

  95. tcp100 says:

    @thefncrow: Right, but my point is (and I’m getting tired of beating this drum) is not that Verizon is “right” to change the terms, but that if customers keep doing this, they will do away with the material change “out” clause altogether. There is nothing forcing them to keep that in there.

    Or, they will have to put a hard and fast limit in there – and you can guarantee it’ll be in their favor, not yours.

    The current wording lets them handle things like this on a case by case basis.

    Again, the issue the OP has, I guarantee, you, is NOT THE FIFTEEN CENTS. That’s simply the clever “out” that he’s found.

    Verizon knows this, and he hammered his point home by criticizing the CSR who even he admitted was polite at first.

    If he laid out a reasonable argue to terminate, such as “Your coverage in the area I am in is insufficient, and you have changed the terms of the contract, so I would like to cancel”, I think he would have gotten much further. He could have also logically applied the “what if I paid 15 cents short” argument that many have used here.

    But no, he took the tack of “Your service sucks, you make me hold a lot, and oh, you gotta do what I want because of the 15 cent fee, in your face!” He wants to cancel his contract for ulterior motives, not legitimately due to the 15 cent fee. He’s misrepresenting himself, and has put Verizon on the defensive.

    Verizon’s response? Basically “Sorry, so sue us.”

    How do you think the CSR will now treat the next guy who has a legitimate reason to get out of the contract, but may require the benefit of a doubt?

    Everyone’s flag waving about principle here, but trying too hard to win some battles can make you lose the war.

  96. Mike8813 says:

    I tried this, got told the same things. No cancellation without an ETF.

    Then I brought up the fact that I’ve been riding the “extended network” a lot since my move to Kansas last week. They let me cancel in a heartbeat. $0.15/mo charged to the consumer they don’t care about. Roaming charges payed by Verizon, they do care about. I got lucky. Good luck to the rest of you.

  97. tcp100 says:

    @blainer: This is true. It’s not tit-for-tat. In the wording of the contract, which the OP agreed to, Verizon has the ability to change terms under certain parameters. The other party does not, at all.

    It is not expressed nor is it implied.

  98. dragonvpm says:

    @tmlfan81: Dream on.

    When it comes to contracts the courts seem to consistently be finding that a lot of them go a bit farther than they legally can (e.g. shrinkwrap licenses).

    It’s one thing for a consumer to not be able to litigate this, but now that you mention it, it’s funny how Verizon hasn’t taken any of these fights to court to prove that they’re in the right with what they’re doing. It’s not like they can’t afford it…

  99. BigElectricCat says:

    @tcp100: “I’m not sure what bearing the b2c vs b2b has on it?”

    I’m not sure that it has any bearing either, but that’s the sort of niggling little detail that an attorney might seize on. Eg: ‘Your honor, clearly the provision that applies to large corporations was never meant to apply to private individuals, especially those who may have no understanding of contracts, accounting and related fields. Clearly the provision is unconscionable when applied to a private citizen, such as my client.’

    I’m just spitballing here though.

    @BrianH: “The damn phone companies should just stop subsidizing the phones, and de-couple the phone from the contract. (In other words, not *require* a contract. When I was a product manager at Motorola Infrastructure, we were working with a company that was contemplating offering 2 monthly rates, one month-to-month and one for a 2 year contract. It can be made to work.)”

    I do the prepaid thing now that I don’t have to have a work-provided cell phone. I like the idea that if I don’t use it, I don’t owe anybody anything.

    @jfischer: “The easy test of “reasonableness” is to ask if Version would accept payments that were consistently 15 cents lower than the amount billed as “payment in full” for that billing period.”

    IMO, this is exactly the question. If it isn’t “material” to the customer, then is it “material” to Verizon? If so, then why can’t it *also* be material to the customer, thereby triggering the clause in question?

  100. tcp100 says:

    @BigElectricCat: “IMO, this is exactly the question. If it isn’t “material” to the customer, then is it “material” to Verizon? If so, then why can’t it *also* be material to the customer, thereby triggering the clause in question?”

    The only thing I’d say to this is what was said above.. The contract specifically specifies that THEY may change terms subject to that clause. It does not anywhere say or imply that YOU can, subject to any clause.

    The fact that they expressly can does not in any way imply that you can. The contract, as written, does not impart equal rights on both parties, nor does it have to.

  101. blainer says:

    @BigElectricCat: “IMO, this is exactly the question. If it isn’t “material” to the customer, then is it “material” to Verizon? If so, then why can’t it *also* be material to the customer, thereby triggering the clause in question?”
    Just because Verizon won’t agree to it doesn’t mean that it’s material. Verizon won’t accept the change because, by the terms of the contract, they don’t have to determine if the change is material. Certainly you aren’t arguing that this change IS material to Verizon, are you?

  102. thefncrow says:

    @tcp100: There certainly is something in there to stop Verizon from removing the out. If Verizon wants to be able to modify the contract, they’re going to have to leave the customer an out, and I think it’s clear that they do want to be able to modify their terms, so them getting rid of the out is not a possibility.

    If Verizon wants to change their contract to define materially adverse, they can, and it’s their right to do so. If you don’t like the terms, don’t sign the contract, but those terms will be available up front. Further, ironically, any change to the definition of “materially adverse” is a materially adverse change, and so any such rewrite would allow any and all Verizon users out of their contracts.

    Whether or not he’s cancelling because of the 15 cent change doesn’t matter. If the 15 cent change is materially adverse, then it’s materially adverse, and it doesn’t matter if his real reason for cancelling is that he doesn’t like the color of the paper his bill is printed on, any materially adverse change lets him out of the contract without an ETF.

    You seem to be under the impression that the clause is there to allow out people who want to cancel based on the change, when this isn’t true at all. When Verizon decides to change the contract, you either have to accept or reject the changes. If you stay, you accept. If you don’t want to accept the changes, you have to cancel the contract. Maybe you’ve wanted to cancel for some time, you have a litany of complaints, and only that ETF was stopping you from canceling your service.

    If the change was materially adverse, and I’d claim that it is, then you have an opening to cancel your contract without an ETF, and the “why” doesn’t matter a single bit. The “why” could be “Verizon has installed wiretapping devices in the fillings of my teeth”(or something similarly crazy), but if Verizon alters the contract and the change is materially adverse to the customer, Verizon is contractually bound to let the user out without an ETF, or to provide relief in order so that such a change has no adverse effect.

    I agree that he’s not cancelling because of the $0.15 fee increase. Verizon could give him a credit for $0.15 times the number of months remaining in his contract, and that would resolve the materially adverse change and leave him without an out to cancel without an ETF, and that’s what they should likely do. But the change is most definitely materially adverse, and arguing that it is not is incorrect.

  103. tcp100 says:

    @thefncrow: No- I’m arguing that issues like this will cause Verizon to not put the Materially Adverse clause ambiguously in future contracts, for other customers.

    While in some cases that may be good, in others, that may be bad. If they narrowly define it, I would guarantee that it would favor them, not the consumer.

    I think that the contract, as is, allows interpretation on a case-by-case basis. In this case, I think Verizon rightfully told the guy to pound sand. I still contend that “materially adverse” is not an arbitrary threshold that can be dreamed up by one party to the contract.

    So, you’re interpreting “material” as meaning “anything that changes the substance of the contract” and “adverse” in a negative way. I can see that.

    However, one might also interpret the phrase unto itself as meaning “negative with a degree of substance”, such as in this definition of “material”:

    “12. of substantial import; of much consequence; important: Your support will make a material difference in the success of our program.

    Using that definition (Dictionary.com sources it from Random House Unabridged Dictionary) – I’d say that Verizon could easily argue that the 15 cents was not material.

  104. chrisjames says:

    @tcp100: The ambiguous definitions actually work in favor of the companies, not the consumers. They give vague responsibilities of each party, assuring customers that the ambiguity swings in their favor, not the company’s. Of course, just the opposite holds true when the consumer needs to confront the company, they swing it back in the company’s favor.

    Concrete terms in contracts benefit both parties, insofar as the contract is mutually agreed upon.

  105. chrisjames says:

    @chrisjames: Though I agree this squabbling over 15 cents is going to cost consumers in the end, somehow, just like the EECB is losing effectiveness with some companies.

  106. Tank says:

    @tcp100: yeeh, it’s a buck eighty a year to us, but with 60.7 million subscribers, it means an additional 9.1 million dollars a month to the bottom line at verizon. it only takes a couple months to add up to a lot of money.

  107. I know the what the term “materially adverse” means, I just find it hard to believe that $1.80 more a year is materially adverse to anybody.
    Granted though, since its not spelt out in the contract, technically they should be allowed to get out of the ETF.

  108. akalish says:

    I’d like to see a youtube video of the screaming part, cut back and forth with the Verizon guy saying, “Can you hear me now?”. Would that just be the best?! :D

  109. Side note, Ben if your going to XXX out his last name, you should probably do it after the sincerely part too. Not trying to knock you at all, just wasn’t sure if you knew you missed it.

  110. Ben Popken says:

    @graffiksguru: I didn’t X it out, he did.

  111. snclfe says:

    @tcp100: Wow – at first I thought you were a “reasonable person” until you stipulate that minimum wage is $61.70/hour. In CA it’s currently $8/hour and I know that’s higher than a lot of other places.

    If Verizon really wanted to avoid this, they’d just waive the new fee for anyone trying to terminate their contract. I bet that would be more effective than laughing at customers.

  112. trujunglist says:

    Just the very fact that Verizon can’t seem to understand the simple idea of “if the shoe was on the other foot” makes me want to call them and cancel using this as an excuse. But, I’m waiting for the new iPhone.

  113. trujunglist says:

    @JustThatGuy3:

    You keep bringing up the fact that there has to be a reasonable person somewhere in there to help decide what is materially adverse and not materially adverse. However, Verizon’s own contract states

    .. IF THE CHANGES HAVE A MATERIAL ADVERSE EFFECT ON YOU

    So really, it’s all about YOU, not some so-called “reasonable person.” You can be as unreasonable as you want, they say YOU, meaning by your own definition. If I define “shit” as “great to eat”, well fuck, that’s not really very reasonable to a normal person, but hey, I like it, so who are you to say differently?
    On another note, I find it somewhat hilarious at how easy Verizon makes it sound to terminate without ETF. “Just call us up within 60 days, no problemo!”

  114. scoosdad says:

    While everyone here is arguing over the OP’s right to cancel or not cancel over fifteen cents or that he should suck it up and pay the $1.80 more a year, you guys is missing the point of what he’s actually trying to do:

    While it doesn’t specifically say so in the story, he probably thinks his Verizon service is not worth what he was paying for it before it went up the lousy 15 cents, and he’s trying to use the change as an legal reason to get out of his contract without the ETF.

    Consumerist has advocated this approach in the past and has alerted us to various minor changes in contracts like this to be able to get an escape from services we’re sick of paying for. Stop whining about fifteen cents, this is not about that at all.

  115. JustThatGuy3 says:

    @snclfe:

    If you’re attacking someone else’s math, it helps if you get your own right.

    Federal minimum wage: $5.85/hr (currently – it rises in July)

    0.15/5.85= 0.026 of an hour

    60 minutes per hour * 0.026 hours = 1.56 minutes = about 1 minute, 34 seconds.

    So, this price increase amounts to about 1 minute, 34 seconds of minimum wage effort per month, pretty darn close to what tcp100 claimed.

    It’s YOUR math that’s way off – looks like you took a whole year’s worth of charges ($1.80), and tried to figure out what the hourly wage would be if $1.80 = 1 minute, 45 seconds. The result you got is off by a factor of 12.

  116. JustThatGuy3 says:

    @trujunglist:

    Yes, they do say that. Your assumption that this means that YOU get to determine what’s “materially adverse” is, well, just not true. You’re welcome to believe that, but it’s not how contracts work. Think of it this way – what if they wanted to change the contract to correct an incorrectly spelled world, and you said “that’s materially adversely impacting me, the contract now has an even number of letter Q’s in it, and I find that morally offensive.” You’re welcome to try that strategy, but it’s not going to get you anywhere if/when you take it to court.

  117. Concerned_Citizen says:

    @savvy9999:
    Material means any. Because otherwise they could just do one small increase every month to get around any restrictions.

  118. JustThatGuy3 says:

    @Concerned_Citizen:

    No, it just doesn’t. If the contract meant “any,” they just had to leave out the word “material.” Material means that not all revisions that are adverse to you constitute grounds for cancellation.

  119. nonzenze says:

    There is an objective standard for what counts as material. Anything less than $5 ($.15 x entire 24 month contract) is just not going to cut it.

  120. nonzenze says:

    “Material means any. Because otherwise they could just do one small increase every month to get around any restrictions.” No, because no court on the planet would see a string of $.01 increases and determine that, since each is de minimis, the whole thing is. That kind of logic should cease to be convincing when you pass age 5 and realize that other human beings are capable of assessing an entire situation.

  121. nonzenze says:

    “You’re welcome to try that strategy, but it’s not going to get you anywhere if/when you take it to court.” I should caution you that most courts will slap you with fines (“sanctions”) for filing frivolous motions and wasting the court’s time if you try this more than once.

  122. thalia says:

    This happened to my husband. He wanted off Verizon and they increased the text message rate by one cent. He called in and they said he wasn’t eligible because although he had a text messaging plan, he had only used it to send three text messages since he’d had the phone. He said that of course he was entitled, they were breaking their end of the contract and per their own policy had to let him out of his contract without a fee. The lady finally offered a 50% slash in the fee but my husband stuck to his guns and asked to be transferred to someone else because she flat out refused to do anything more. He remained calm and polite and within minutes, they had no choice but to let him out of the contract without an ETF. Over three text messages. We went out for dinner that night :D

  123. god_forbids says:

    None of you are accountants, eh? Lack of materiality can apply to MILLIONS of dollars, if your company’s transactions are typically way larger than that. There is no person in the United States to whom 15 cents a month is “material.” Your YEARLY budget would have to be something like $100, and in that case you wouldn’t have cell service anyway.

  124. BigElectricCat says:

    @blainer:

    “Certainly you aren’t arguing that this change IS material to Verizon, are you?”

    If the change is “material” to Verizon, then why can’t it also be “material” to the customer?

  125. blainer says:

    @BigElectricCat: The change is NOT material to Verizon. Verizon can reject any change by the counter-party and sue to collect monies due buy not collected, however, because the contract does not entitle the counter-party to unilaterally make changes.

    The contract DOES allow Verizon to unilaterally make adverse changes as long as they are not material to the counter-party.

  126. noorct says:

    Nothing like having non-lawyers saying that a .15$ increase isn’t materially adverse. And who the hell dragged the reasonably person standard into this?

    In fact, as someone else pointed out, any change in the price of the contract is materially adverse. The minute difference in the amount doesn’t even factor in. Nice try though!

  127. xsmasher says:

    @tcp100: “material adverse” is not a “fuzzy term” it’s a legal term.

    As you say, the customer signed a contract with Verizon – and the contract says that if Verizon makes a material adverse change, the customer can get out of jail for free. So who’s scamming who here?

  128. blainer says:

    @noorct: I’m a lawyer and I couldn’t disagree with you more. Your conclusion renders the addition of the word “material” to be useless. How do explain this? What is your definition of material?

    Like you, I’m not sure that I agree that this is a reasonable person standard, though.

  129. BigElectricCat says:

    @blainer: “The change is NOT material to Verizon.”

    Well, I have to respectfully disagree with you here. Clearly, Verizon thinks that a 15-cent change to the billing rate is material, or else they wouldn’t be making the change at all. IANAL, but I can’t fathom such a thing as a *non-material* change to a billing rate. Perhaps you could elaborate on that point?

    @blainer: “Verizon can reject any change by the counter-party and sue to collect monies due buy not collected, however, because the contract does not entitle the counter-party to unilaterally make changes.”

    It clearly does allow the customer to terminate the contract, however, which is the heart of the matter. I think the case hinges on the question of materiality, and who gets to determine what is and is not material to the customer for the purpose of the contract. That’s why I suggested, by way of an example, an explicit limit earlier in this thread. By not being explicit, IMO Verizon is trying (intentionally or not, I can’t say) to cast *itself* as the determiner of what is and isn’t material to the customer. Frankly, I think that’s unconscionable.

    @blainer:
    “The contract DOES allow Verizon to unilaterally make adverse changes as long as they are not material to the counter-party.”

    No argument. As I said, I think the case hinges on the matter of materiality, and who gets to determine what is and is not material to the customer. I don’t see how or why Verizon should be permitted to determine that (and not the customer).

    @blainer: “Your conclusion renders the addition of the word “material” to be useless.”

    Which is, again, why I suggested establishing a explicit limit of materiality earlier in this thread. Respectfully, I think that your conclusion also renders the word “material” useless.

    @blainer: “How do explain this? What is your definition of material?”

    In the absence of an explicit definition (which, again, I recommended upthread), I’d judge any billing increase to be material.

    15 cents does not equal zero. If a billing change of 15 cents a month is to be considered non-material under the terms of a contract, then spell it out. IMO, Verizon is not only in the wrong here, but also put itself in this position.

  130. fcastro says:

    Hi all,

    I am going to recap what my girlfriend has been going through. Early in April I found about verizons text increase .15cents to .20 cents. It was 60 days after they had mailed the notification of increase hidden on the last page of the bill (literally last page on the bottom).

    Regardless I called up and was able after escalation to get a note placed on my account to have it terminated without ETF. I just recently ported to Sprint SERO. My contract was actually coming to an end in a month which is why I think they noted my account.

    Ok so my girlfriend calls up same day with all the same info and scripts I used and they would not let her out of the contract. She then went and filed a complaint with BBB. Verizon representative contacted her back and said the same thing the supervisors said and was then suppose to give her a call back within 24hrs (never happened). They refused to waive the ETF and the battle lingered on till last week when we then found out that Verizon was also increased administration costs.

    So again she called up and this time stated that she was within her 60 days to cancel. Again she escalated it to a supervisor who refused to waive the ETF and instead offered the credit which she refused.

    So then (after reading over at the consumerist.com site) we email blasted a list of execs at verizon. The verizon rep who was headed up the BBB complaint gave her a call back and pretty much reiterated that they will not waive the ETF. Yesterday we did a fax blast to various verizon phone numbers and emails again (aka carpet bomb). But no one has contacted us back.

    I think we WILL be taking verizon to small claims court. I am also thinking of trying to record 1 more conversation with a supervisor with consent. It is absolutely disgusting that verizon thinks they can change the terms of a contract at whim. I will keep everyone posted on the situation.

  131. fcastro says:

    Does anyone have any advice on taking Verizon to small claims court over this increase?