Want The New iPhone? Here's How To Escape Your Current Cellphone Contract ETF-Free
As the second coming of the Jesusphone 3G draws near, we wanted to remind customers of other wireless carriers that there are ways to escape your existing cellphone contract free of early termination fees, and trade your piddling Verizon, Sprint, or T-Mobile bills for hundreds of pages of gloriously itemized AT&T charges. Or just switch carriers.
One way to escape your contract is to call up your carrier and argue that they have made a materially adverse change to your service agreement. Most cellphone contracts contain a clause allowing customers to escape their contracts if a materially adverse change is made, usually in the form of a rate increase. Here's an example clause from a Verizon contract:
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.
Below are some recent rate increases by the major providers. Some of these might have occurred far enough back that they are outside the window to call and complain, but we've also heard from readers who didn't get any notice, or who got late notice, thus keeping them within the required period to contest the change.
T-Mobile
We posted about this a couple weeks ago, but just to reiterate: T-Mobile is raising its text message rates on August 29th. That's a materially adverse change to your contract. Run while you can.
Verizon
Although Verizon likes to play dumb about what constitutes a materially adverse change to your contract, a Verizon fee increase was the impetus for this article: A reader writes in that he used Verizon's recent Federal Universal Service Charge increase to escape without an ETF. Here is Verizon's increase notification:
The Federal Universal Service Charge (FUSC) is a Verizon Wireless charge that is subject to change each calendar quarter based on contribution rates prescribed by the FCC. On July 1, the FUSC changed to 2.42 percent of assessable wireless charges, other than separately billed interstate and international long distance charges. The FUSC on these charges changed to 11.4 percent.
Sprint Nextel
There are conflicting reports that, as of July 13, Sprint will be eliminating its SERO plan altogether, or making existing customers switch to unlimited data "everything" plans, or just forcing that on new PDA customers. Barring that, a text message increase probably isn't too far away.
Other Techniques
We offered advice on escaping your contract last year when the iPhone first came out. Besides complaining about materially adverse changes, you can sell your contract, complain that service is substandard, move to an area out of your network, join the military, or die.
PREVIOUSLY: 6 Ways to Cancel Any Cellphone So You Can Get an iPhone
"Material Adverse" Clauses in Cell Phone Contracts [United Consumer Action Network]
(Photo: Getty)
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Comments:
Here's a question for you. What about Helio subscribers? I pay next to nothing for my unlimited plan but would love to get a new iPhone.
Can I argue the buyout by Virgin Mobile is adverse?
ok, I'm planing to get the iPhone 2.0 tomorrow, but do I tell T-Mobile I want out of my contract before I get the phone or after? I know that if I do it now and don't get the number ported right away, I'll be SOL (sh*t out of luck) and my number goes to the ethers. Any suggestions??
@outinthedark: Wouldn't think so because you haven't been affected in anyway by it yet. If Virgin had already started raising rates or something definatly but its still to far into the early stages to get anything out of it me thinks.
Got 2.0 today for my iPhone and it's beautiful!
Does anyone know if you buy an older, used iPhone (the Edge model), will you be able to get the previous $20 a month data package. My Mom and sister both want one after playing with mine, but neither of them needs 3G. They already have AT&T, so that's no issue.
@tande04: They actually have lower rates. Everything is supposedly already switched over as of the 27th of last month.
Is there nothing I can argue? How about their support of Net Neutrality? Anything?
I really do not want Virgin Mobile...I liked my Helio service for pennies compared to Sprint [the only decent carrier in my area] hence the reason why I went with the MNVO...blah just don't like the Virgin Corporation.
I got out of my T-Mobile contract, eventually, last year, when iPhone 1.0 came out, by porting my number, ignoring the bills as long as possible, then trying to reactivate service under a new number. Every level of T-Mobile service refused to do so, they would only port the original number back. A few rounds of letters to the official address specified in the contract, and finally a T-Mobile person contacted me and offered to either 1)reinstate service under a new number, or 2) let me out of my contract. I chose 2).
It's actually not possible to get out of the Verizon contract due to the change in the Federal Universal Service Charge. According to them (and this is repeated all the way up to executive complaints), the contract allows for changes in the FUSC without warning.
@cambiata: A reader in Washington was able to a couple days ago, even though her bill had only gone up $.02. Here's part of her email:
I simply stated that my bills seemed to keep going up, with the most recent being the Federal Universal Service Charge, and that my contract said that I could cancel within 60 days of being notified of such an increase with no early termination fee. I also mentioned that it had been 5 days since I was notified of the change. The rep put me on hold for a while and then said that she verified the charge increase and wanted to know where I heard I could cancel with no early termination fee, to which I responded "my service contract with Verizon". Afterwards I was put on hold again and she came back and basically said that yes she found that in the contract and that I wouldn't have to pay any early termination fee.Also, I made it clear that I did not want to cancel today. I wanted to activate with a new carrier and port the phone numbers on the account. So I asked the rep to make a note in my account that we do not have to pay the early termination fee when we port our numbers.
@outinthedark: Virgin technically aquired Helio on the 27th but I haven't heard anything about them changing anything yet (though I don't use either so I wouldn't know if they started billing you different or not), like most buy outs/mergers it takes awhile before you see the results.
Either way, its going to have to be something more then just your feelings for the new company. I hate Verizon now but that doesn't mean I get out of my contract.
What about us poor souls who are already with AT&T? I want the new iPhone, but I am currently not "Upgrade Eligible." Despite the fact that I have had my current phone since Feb. 2007, and despite the fact that AT&T is allowing customers who have the old iPhone to upgrade even though those customers have only had their phone for just over a year, AT&T won't waive that stupid eligibility requirement! It's ridiculous! I am supposedly eligible for an upgrade in Oct. I would gladly renew my two-year contract (set to expire in Feb. 2009) since I have never had a problem with the service. I just do not want to have to pay and extra $200 for the phone. Even if I were to pay the full price for the phone, I would STILL have to sign another 2-year contract. IT MAKES NO SENSE!!!
@JennQPublic: Supposedly you can and still activate the phone on iTunes.
You'd just need to find the phone. I'd imagine they're a steal on eBay with all of the people trying to dump theirs before upgrading to 3G.
Audiochick, I was just about to ask that same thing. I am stuck in my AT&T plan, and not eligible for an upgrade until November.
I really would like to be able to get an iPhone this weekend with out paying $400 for it.
Called t-mobile and I got to a supervisor named Lori T. who informed me:
-"The cost of everything is going up; food, milk, gas and so must text messages. They use up minutes on our towers!"
-"We don't have to inform you of any rate changes or let you or anyone out of there contract. We do it to be nice. Read your contract."
-"I don't care if your phone doesn't work at your house. No cell phone company can guarantee reception. Get a land line if it's that big a deal."
Hooray for t-mobile!
You think Sprint will buy the "push email with my MobileMe account doesn't work on my Moto Q9c, so uhhhh, iPhone time???" Will they look at the website and see that it's still down?
I'm more interested in getting a 3G iPhone and using it on T-Mobile's network since their Family MyFaves plan saves us around $60 monthly when compared to an AT&T plan.
16G is still not enough space for my music. And I gotta share that with other apps? No thanks. If apple is going to try to sell me on the "all-in-one" factor, they'd better give me enough gigs warrant chucking my ipod.
@KiLE: Typical. If it weren't for a severe company discount, I'd left them a long time ago.
@Alex Chasick: I am going to have to try that when I get home. I have been fighting tooth and nail with those bastards trying to just get rid of my "extra line" which wasn't explained to me as being a seperate contract. Now I want nothing more to do with them.
@audiochick: @rup3t: I was told when I bought mine that upgrade eligibility was irrelevant. AT&T told me they didn't care what my status was, the iPhone price is what it is, period.
Also, when I looked at my account (not upgrade eligible) online, versus my Mom's account (eligible), there was no difference in price.
So, I don't think it matters, if you want the iPhone (and trust me, you do), you'll have to pay full pop.
That said, standing in line for it seem rather silly. The phone will still be there in a couple of weeks. As long as you have something to talk through right now, just wait until the dust has settled.
Anyone have any information on a way to get out of AT&T? I'm waiting for them to make changes so I can get out, but it seems like everyone but them is doing it these days...
@howie_in_az: Good luck with that, T-Mobile and AT&T's 3G networks appear to not be using the same technology; [www.breakitdownblog.com]
Sockpuppet warning: I work for a PCS provider
@KiLE:
-Food milk and gas don't have contracts that agree upon specifics (like price).
-Response: "Oh, that must have been part of an older contract...the one with the ETF, right?"
-Go HERE and lookup your address. Compare your phone's current reception to what the color-key says it should be. If they don't match (and your phone's signal is less) than you have a very strong rebuttal to that argument.
In general, be polite, but firm. Don't let them push you around. Have the contract up on your screen or printed out in front of you. Have the relevent escape clause highlighted. If needed, get a Websters Dictionary and dog-ear (or bookmark) the pages for "materially" and "adverse." Note that the terp "adverse" is subjective and the way the clause is worded their interpretation is immaterial. Natch, none of these are gurantees. Best of luck.
I@rup3t: @
href="#c6619395">JennQPublic: @
href="#c6618803">rup3t:
I spoke to both Apple and AT$T today and was told that I would pay FULL PRICE for the 3G since I still have 2 months left on my current AT$T contract.
If you have Alltel you just have to wait until the Verizon takeover goes through.. Verizon has said that any Alltel customers that don't want to become Verizon customers can cancel their contracts without an ETF.
@ionerox: The 3G part doesn't interest me, mostly due to Tmo using crazy oddball frequencies but also because I'm not expecting browsing the web on a handheld to be all that fast, plus I'm used to my insanely slow 1.5mb ADSL connection at home. The new iPhones still have GSM capabilities, which they'll fall back on should the user dare to venture somewhere that isn't 3G-covered (like most of the US, for instance).
@big keytee: I had the same dilemma with T-Mobile, but you can cancel your account today with a date in the future. Make the argument that you want to cancel making sure that an EFT won't be added, but then tell them you want to have it canceled on [date after you know you'll have the iPhone]. The contract will expire the moment you get your numbers successfully ported, but your account will already have the EFT removed. > all of this explained to and done for me by the {second] CSR rep at T-Mobile (didn't even require a manager).
To all who want to know how much they will pay for the Jesus Phone, straight from the ATT website:
What will I pay for iPhone 3G?
If you are upgrade eligible and your account is in good standing, you will pay $199 for 8GB (black) and $299 for 16GB (black or white). Two-year contract required.
You have the option to purchase an early upgrade priced at $399 for 8GB (black) or $499 for 16GB (black or white). Two-year contract required. Coming soon, AT&T will offer a no-commitment option of $599 for 8GB and $699 for 16GB.
the T-Mobile text raise rate cancellation fee really works. I didn't even have to argue with a CSR.
I switched to AT&T 6 months ago when I didn't know the new iPhone was coming out. Now I'm being penalized for being a current customer. Had I been paying Verizon $150/mo for the past 6 months I would have been rewarded with a low price on an iPhone. But since I've spent over $1000 with AT&T already, now I get to purchase the iPhone for a paltry $599.
It's simply unacceptable to treat your customers that way. Seems I would have been better off giving my money to Verizon the past few months.
SPRINT CUSTOMERS!!!!
If you have around 8-6 months left on your contract simply tell them you are leaving the country, you can go down to a $6 a month plan which basically shuts your phone off. You can stay on this plan for 6 months and if that is all you have left (like me) that means a $36 ETF.
THIS DOES NOT EXTEND YOUR CONTRACT.
How are you being penalized? I am sure you received a discount for the phones that you currently own, the phones you have now were subsidized and thus you received a contract. If you would of paid full price for the phones you would not have had a contract and would of got the Jesus phone for $199.
Your contract actually freezes and picks right back up when you reactivate. I know I had the plan when I was in the Marines. So if you had 6 months left, when you reactivate you'll still have 6 months left
T-Mobile already made a change in the service agreement without notifying their userbase: they charge now for printed bills if you opted for paperless bills. Case and point: I needed to bill a client for 12 months worth of phone calls (i know, i've deferred payment for waay too long) and I went to access the bills and call history online and lo and behold they aren't there. I call T-Mobile and as of May 2008, if you want your bills, its $5/bill for backdated bills. The best part about being punished for trying to reduce their paper waste is that they did notify their customers ON THE PRINTED BILLS, not online so users like me never were aware. I'd say thats grounds for an 'adverse material effect.'
I tried getting out of my contract using the FUSC with verizon wireless, and I was successful.
Here are some things that I encountered:
1. They will try to tell you that you are not within 30 days of signing your contract. Read verbatim the Customer Agreement "...materially adverse within 60 days..." and that it does not apply to the first 30 days.
2. I used the FUSC as reason to get out of my contract. Stay firm with this. You will be put on hold several times to look into this change.
3. Be polite and patient. They will give you the option to cancel or port your number. I chose to port, and they mention that FUSC applies to the new carrier.
4. Make sure to get their name in case an issue arises, and that they will be noting your account.
Good luck and hopefully all goes well for you!
@KiLE: I went straight to the Retentions dept and canceled my family plan as soon as I read about the sms price hike. The rep was extremely polite but didn't know what I was talking about until I pointed out about how the price hike adversely affected my account, blah x 3 and I was set free. You have to be persistent, polite yet firm and make them understand that you are not budging until everything is rectified. Of course I copied down her Rep ID eventhough I was assured that I wasn't going to be hit with $400 worth of ETF charges.
Sprint has already modified their T&C to state that other than your base plan, any other fees change not affecting the price and services on your base plan does NOT constitute a material change. So no juice for Sprint even if they raise the per SMS charge. Government fees are also excempted from material changes according to the new T&C. Sprint has also bundled a couple of fees into a new category call "Administrative charge" that's subject to change and does not constitute material change, according to them. Try to use any of those to cancel etf fee and you probably have to fight them in court.
@post_break: If you have around 8-6 months left on your contract simply tell them you are leaving the country
Do you have to provide proof of this, such as plane tickets, employment/military orders, etc?
I know this advice is aimed primarily at the US market, but here in the UK we have similar laws regarding 'materially adverse affects' of contract changes from Uk mobile operators. I have successfully cancelled a T-mobile contract when they changed how 0870 numbers were billed to my contract. Usually the operator will make you jump through hoops to rightfully cancel but they are aware of the laws regarding these changes and will not stop you eventually. I don't know about the US but in the UK a quick reminder that you'll report them to OFCOM, Trading Standards, the industry adjudication panel ( whose name escapes me) etc., will spur them into rightfully releasing you from your contract
I forgot to mention in the post, but please keep sending all your success stories to our tipline (tips@consumerist.com) and let us know anytime your carrier increases your rates so we can help others get out of their contracts.
@haoshufu: Waitaminit, I know they can try to put whatever they want in the contract, and pull the materially adverse section altogether, but isn't "materially adverse" covered in contract law such that it's assumed and not removable? Similar to unenforceable releases that try to protect against negligence?
Obviously, IANAL.
In terms of contract law - i.e. actual law, not just what you can BS around with customer service, something material is something that would cause a reasonable person to change their mind about something--so an SMS fee based on lots of usage would be reasonable...limited usage not so much.
too bad I can't get past the stupid credit check. I have been a in good standing customer for more than 2 years.
@rhmmvi: So it comes down to the effects of the changes in each case? Can it be potentially adverse or does one need to show history? i.e. I use lots of weird feature B and can show usage. If they bumped weird feature B price I could demonstrate it was materially adverse while my buddy with the same contract but no usage cannot?
Are these contact clauses that cover materially adverse changes essentially stating desired policy as opposed to what's enforceable? (to bluster both customers and CSRs)
[B]BE CAREFUL ON THE PHONE WHEN INQUIRING[/B]
Shocking story. I called to ask about this and see how I could go about getting out of my contract. The man told me about the price increase, and then implied that because I had 400 txts plan and I had never come close to going over, it would only be the other line on the account (my mom's, with no text plan on her line) that would not have the ETF applied. Then, he turned around and he seemed to imply that the ETF exemption could apply to both.
But this is the tricky thing he did next. He kept talking over me and said that now that you've been in contact about the change over the phone, if you stay, you are ACCEPTING the change in fees. Literally, if I don't make the decision then and there to leave (not just get out of the contract and go to monthly pay, but IMMEDIATELY END SERVICE), I lose the opportunity to get out without ETF in the future, simply because he's spoken to me, as if I've made the implicit agreement by hearing him speak, that the price hike is OK and so give up my claim to want to get out without ETF in the future!
So don't let them overtalk you. Even better, do not even call unless you are ready to move out of T-Mobile and make the number port to a new carrier. I think if I said, yes, end service by porting me to AT&T, I would be fine and get out of the early termination fee, but otherwise, he sounded like I had to forfeit the termination fee exemption if I didn't agree to leave in that same conversation.
Luckily, I turned this around on his head by telling him I'm not the person paying/the primary account holder (which I'm not, my mom is) so I can't make that decision to stay or go. He got defensive and said "I didn't mean "you" as in "you personally," I just mean the generally, this is how it works", so I asked him to hold and I hung up. Basically I think I can still get out because it's up to my mom to make the request to leave to them, but damn...watch out. They will try to swindle you, corner you, pressure you, and since they know you probably are calling to find out for sure if this works and that you were planning on calling later to make the actual cancellation, they will try to stop you by giving you this BS. Be VIGILANT!
f**K the iphone. It's still too expensive, too restrictive and it makes me feel like Jobs indentured servant. I hope someone copies and makes it better, and I can laugh at all the dumbasses that bought this POS.
@rhmmvi: The legal definition has previously been covered.
When T-Mobile hikes the SMS fees by 33% to 20¢, for example, I wouldn't care what my historical usage is. I may only have sent 2 SMS messages in the past few months, but that doesn't mean I gave up the option to send 10,000 messages at the old rate. The new price has precluded me from exercising an option I had when I agreed to the contract.
(And oh! How I long for the early 21st century, when a T-Mobile SMS was 5¢. That's a 400% increase in 6 years, but I haven't had a contract since 2003, so I got nothing to stand on.)
So I actually just got off the phone with T-Mobile and after an hour of talking with the supervisor, they would absolutely not cancel my ETF fee. I have two lines and both of them have the 1000 txt message plan. I called them up and did the whole "Material adverse effect" thing and they told me that that excuse doesn't work anymore and that it's BS (Amy the supervisors words by the way) and that my account did not qualify for the ETF waiver. I asked her exactly why I didn't qualify and she told me: "I don't have to tell you that. You can take it up with the legal department if you wish." Eventually she just kept telling me she didn't have to do anything with my account and that I should stop saying "material adverse effect". So I'm going to send a letter to the legal department and see what happens.
thanks for the info...now, for my n82
and they released saying that the iphone 2.0 is jailbreakable/unlockable already over @ gizmodo. hooray! early adopters!