Pay Your Early Termination Fee Or Get A Black Mark On Your Credit Report

A cell phone provider’s early termination fees isn’t a polite suggestion — it’s a contractual payment you’ve agreed to give to the company for failing to stick with its unsatisfying service. Whether or not the agreements are ethically valid, you’ll have to pay them or face collections and a likely scar on your credit report.

Take M’s story as evidence to the fact:

A few years ago, Sprint wouldn’t replace a phone that was damaged even though I’d purchased insurance.

As a result, I switched carriers and didn’t pay the early termination fee. I figured that it was Sprint who was causing the cancellation of the contract by not honoring the insurance.

They sold the debt to a collection agency and now the collection agency has listed it on my credit report. I had a lawyer write a letter to the collection agency but that went nowhere. I challenged the charge on my credit report but that didn’t remove it either.

A court in California ruled that Sprint illegally charged early termination fees and Sprint entered into a nationwide settlement to preclude additional litigation, however that didn’t help people like me whose accounts were turned over to collection agencies. It is not Sprint who is reporting to the credit agencies, but the collection company that bought the debt.

What, if anything can I do (besides pay the early termination fee)?

What have you told a cell phone provider to get it to let you out of an early termination fee?