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FCC calls Verizon’s doubling of early termination fees ‘troubling’
December 23rd, 2009, 5:17 pm · 10 Comments · posted by Tamara Chuang, a.k.a. The Gadgetress
Noted: Verizon Wireless got reamed by consumers and geek sites last month when it decided to double some early termination fees to $350. Today, the U.S. Federal Communications Commission, which regulates the wireless communications industry, called Verizon’s rational for raising the fees ”unsatisfying and, in some cases, troubling.”
Verizon had responded last week to FCC queries, explaining in a 77-page letter that such early-termination contracts help promote consumer choice and the use of mobile broadband.
FCC commissioner Mignon Clyburn wasn’t amused. She calls out Verizon for changing the rational of early termination fees — from being tied to the cost of the phone to pay for other company expenses. In a statement, Clyburn says this:
“In particular, I am concerned about what appears to be a shifting and tenuous rationale for ETFs. No longer is the claim that ETFs are tied solely to the true cost of the wireless device; rather, they are now also used foot the bill for ‘advertising costs, commissions for sales personnel, and store costs.’ Consumers already pay high monthly fees for voice and data designed to cover the costs of doing business. So when they are assessed excessive penalties, especially when they are near the end of their contract term, it is hard for me to believe that the public interest is being well served.”
Last month, Verizon began charging $350 for higher-end devices like smartphones, netbooks and other advanced devices. The previous rate was half that, at $175. The higher rate kicks in only on customers who sign a new contract.
Verizon still will prorate the contract, subtracting $10 a month (all other phones are prorated $5/month). So, by the end of 23 months, affected users will still need to cough up $120. But by then, you might as well wait a month to leave without paying a penny.
As I’ve mentioned before, anyone can test a Verizon phone for 30 days and then cancel without having to pay any early termination fee. Read my earlier story covering testing policies, I mean, return policies by the major mobile providers: “How any consumer can ‘test’ a cell phone.”
Verizon also adds that if you bring a compatible phone to its network and sign up for service, you don’t have to commit to any long-term contract.
Read the FCC’s full response here:
Statement of Commissioner Clyburn Regarding Verizon Wireless’s December 18 Letter on ETFs
Read Verizon’s letter to the FCC:
Verizon’s response to FCC inquiry on increase Early Termination Fees
More cellphone news:
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Is the FCC going to cap the early termination fees before they get out of control?
As someone that was a vendor to Verizon for almost 5 years, I can safely say that they are bureaucratic and and difficult for the express reason of being bureaucratic and difficult. I recently considered switching to Verizon after the release of the Droid phone, however paying them money on a monthly basis was so incredibly distasteful to me I decided to stay with an inferior service but a better device. Bottom line is Id rather slam my own hand in the car door than give them a penny of my money.
I’m in the same situation now, Jeanette! And with this story, I’m going to reconsider other alternatives. The main thing is to get away from AT&T, but not to just wind up in a worse mess with Verizon.
Verizon has a systematic policy to take as much of your money as you will allow. I have to audit my bill every month. 4 lines/phones. THEY OVERCHARGE EVERY MONTH. I have to call and argue, I’m told they can’t change the bill, no credits not gonna happen, never. After arguing for 15 minutes I get the credit. I think most people don’t hang in that long. It’s clearly a policy to get you to give-up and pay.
“oneraisin says:
December 23, 2009 at 8:57 pm
Is the FCC going to cap the early termination fees before they get out of control?”
What do you mean will they get capped before they are out of control…last time I looked at all phone contracts, they looked pretty much out of control.
Finally! Some news you can use!
Now that we are able to see that Verizon is “anti-customer” we can choose to do business with some one other than them! Naturally, that will be meaningless if the other phone companies sign up with this price fixing scheme and help to prove that the phone companies are as onerous to there customers as the Credit Card companies and the Cable companies.
Just a bunch of thieves and crooks, the lot of ‘em.
what a bunch of goons.
I havent had any problems in over 10 years with T-Mobile
the culprit here is the fcc…they should start using the iron hand in handling with these providers…they just keep on charging and raising fees without any improvements in their services…
Like most federal and state consumer protection agencies we will get to watch them do nothing until the agency heads start losing their jobs.