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New Wireless ETF Policies Compared
T-Mobile's two-year plan pales in comparison to AT&T & Verizon''s.

Consumer Reports (via the Consumerist) has an interesting post that compares the new early termination fee (ETF) policies wireless companies have been migrating to. A Consumerist graph (below, right) highlights how T-Mobile's new ETF system doesn't give discounts until very late in your contract. It also explores how AT&T and Verizon's new policies are very similar ($5 is taken off of your ETF for each month under contract), though Verizon offers discounts more quickly than AT&T. Says Consumer Reports:

quote:
Click for full size
while T-Mobile's announcement is welcome, its pro-rating is in some ways less generous than the schemes for Verizon and AT&T, the other majors who pro-rate their termination fees. T-Mobile's $200 fee, the highest among the three companies, doesn't actually drop at all for the first year-and-a-half of two-year contracts. When it does, it drops to $100 from the nineteenth through twenty-first months.
Note that Sprint doesn't pro-rate ETFs, but they've stated that they will soon. The report notes that T-Mobile's new ETF plan does look more appealing for users under a one-year contract, but the Verizon Wireless policy comes out on top.

This shift to new ETF policies was prompted by Attorneys General and class action lawsuits concerning the misleading marketing of ETFs. Carriers are currently lobbying the FCC to pass wimpy federal guidelines (laws requiring carriers do things they're already doing) that would invalidate the stronger state-level consumer protection laws that prompted these changes in the first place.
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Toymaster
Premium Member
join:2001-12-27
Flint, MI

Toymaster

Premium Member

AT&T...? EFT

I saw an flier this afternoon where AT&T will "Pay half of your early termination fee" when you sign up with them and switch. Now I wonder if they would have done this if the pro-rated was not active? I just worry about the ppl falling for this.
And should not the EFT reduction be more vigorous? I think 5USD a month is pathetic.

en102
Canadian, eh?
join:2001-01-26
Valencia, CA

en102

Member

Re: AT&T...? EFT

I'm sure there's some fine print as well...
It might be 'pay half of your ETF*'
Based on ETF being at already 1/2 of original ETF, and signing up for a specific data/plan + phone.

dvd536
as Mr. Pink as they come
Premium Member
join:2001-04-27
Phoenix, AZ

dvd536 to Toymaster

Premium Member

to Toymaster
said by Toymaster:

I saw an flier this afternoon where AT&T will "Pay half of your early termination fee" when you sign up with them and switch. Now I wonder if they would have done this if the pro-rated was not active? I just worry about the ppl falling for this.
And should not the EFT reduction be more vigorous? I think 5USD a month is pathetic.
A T & T you want subs that bad? how about paying off the WHOLE ETF!

Toymaster
Premium Member
join:2001-12-27
Flint, MI

Toymaster

Premium Member

Re: AT&T...? EFT

They probably will not pay it off no matter the circumstances...but I still think the drop off should be more vigorous.

K3SGM
- -... ...- -
Premium Member
join:2006-01-17
Columbia, PA

K3SGM

Premium Member

And After 2 Years....

Even if you are no longer under a T-MO contract, you pay the Subsidized Fee for a New Phone, PLUS their new $18 "Upgrade Fee".

pnh102
Reptiles Are Cuddly And Pretty
Premium Member
join:2002-05-02
Mount Airy, MD

pnh102

Premium Member

Reminder Everyone!

Don't forget that it is also possible to get cellular service without any ETF whatsoever. Simply paying full price for a phone or going prepaid are 2 of the most common avenues for escaping contracts and ETFs.

Toymaster
Premium Member
join:2001-12-27
Flint, MI

Toymaster

Premium Member

Re: Reminder Everyone!

True, but who has the money to pay say 300+ dollars for a brand new shiny phone? With the way the US economy is tanking, I doubt very many of the middle class or lower has that kind of funds just waiting to be used.
Tallion
join:2002-09-04
Minneapolis, MN

Tallion

Member

Re: Reminder Everyone!

You said it all right there brother!

I just gotta spend more than I can afford!
joebear29
totesmcgoats
join:2003-07-20
Alabaster, AL

joebear29 to Toymaster

Member

to Toymaster
Why do you need a $300 phone? I just bought one from a coworker for $25 that will work great.

Toymaster
Premium Member
join:2001-12-27
Flint, MI

Toymaster

Premium Member

Re: Reminder Everyone!

And I inherit phones from my sister. I am trying to get her S1 now got here PM325 earlier. Not everyone can get hand me down phones. Or have co-workers to get phones from.
joebear29
totesmcgoats
join:2003-07-20
Alabaster, AL

joebear29

Member

Re: Reminder Everyone!

www.ebay.com

Can get a decent Verizon phone with charger for less than $40.

meister_sd
Premium Member
join:2006-01-29
La Mesa, CA

meister_sd to pnh102

Premium Member

to pnh102
said by pnh102:

Simply paying full price for a phone or ....
I tried this with T-Mobile. I have a Treo 650 unlocked and asked them, do I still need a 1 or 2 year contract if I already have a phone. She said yes and the lowest contract they had was 1 year.

I used to be a sub agent a long time ago and I've never seen a new signup that didn't require at least one year commitment. The one thing I kept telling them is, if I like your service - I'll stay with you. I originally signed up with Cingular and had some problems but not many. Ever since ATT got ahold of them, my reception has gone downhill - and that makes no sense. Been with them 5 years and I think it's time to go. The bad thing is I want to go to T-Mobile, but since they don't want to play like the other kids, I don't think I will.

Pre-paid is another way and another conversation.

pnh102
Reptiles Are Cuddly And Pretty
Premium Member
join:2002-05-02
Mount Airy, MD

pnh102

Premium Member

Re: Reminder Everyone!

said by meister_sd:

I tried this with T-Mobile. I have a Treo 650 unlocked and asked them, do I still need a 1 or 2 year contract if I already have a phone. She said yes and the lowest contract they had was 1 year.
Shrug. AT&T offers "no commitment" pricing for its phones. But as for T-Mobile, just buy an unlocked phone off ebay put your SIM in it.
EPS4
join:2008-02-13
Hingham, MA

EPS4 to meister_sd

Member

to meister_sd
Salespeople get larger commissions for contracts, so you may have to do some arguing before they let you on without one depending on who you get.

RARPSL
join:1999-12-08
Suffern, NY

RARPSL

Member

What is the Supposed Function of EFT?

It is my impression that it is supposed to be a reimbursement to the Cell Company for the amount that they subsidize the phone (ie: The difference between the cost to the customer for the phone under a contract and if they buy the phone outright). Thus if it costs me $240 more to buy the phone than go with a 2 year contract, the EFT should be $240 and the reduction should be $10 per month (ie: I should only owe $10 if I cancel after 23 months).

If they want to treat the EFT as a loan against the non-purchase subsidy, then amortize the subsidy and compute it that way with the EFT reductions paying off 1 months interest with the remainder paying down the Premium Amount (ie: Original Subsidy).

This owning a significant amount just prior to the end of the contract is what in the Loan Field is known as a Balloon Payment and is IMO a ripoff - Especially when it is falsely claimed to be a prorated (ie: Full Pay Out) discount.

dvd536
as Mr. Pink as they come
Premium Member
join:2001-04-27
Phoenix, AZ

dvd536

Premium Member

A TRUE

prorated ETF would be total divided by months remaining.

RVAguy
Premium Member
join:2006-01-05
Richmond, VA

RVAguy

Premium Member

Why isn't Sprint Compared?

Aren't they the #3 mobile carrier?

Ben
Premium Member
join:2007-06-17
Fort Worth, TX

Ben

Premium Member

One Year Contracts?

How does it work for a one year contract?

Is it still only $5/mo. off for each month you're in the contract, or would it be larger?

I've wondered about this. I have a two-year contract expiring in August. When it does, I'm canceling and I don't think I'll get another mobile right away.

If I feel that I need another one, I refuse to do anything longer than one-year.

The longer the contract, the lessor my ability to give the finger and tell them to go to hell if they tick me off. This is probably why they have the contracts in the first place.

MineCoast
Premium Member
join:2004-10-06
Pensacola, FL

MineCoast

Premium Member

ETF? Blah!

I canceled my T-Mobile account about a month ago and I still had over a year left on my contract. I had them for 5 years and told the person that it doesn't work decent in my new home (which I had moved in about a year ago)

He asked for the address, and said he would waive the ETF if I fax them a copy of a utility bill. So I sent them my water bill and boom.... done

T-Mobile is alright, but it's useless for me if it doesn't work decent at home. HotSpot@Home is a no go as I need a Windows Mobile Device.

ttiiggy
Premium Member
join:2001-03-27
Bozeman, MT

ttiiggy

Premium Member

ETF

Why does their graph end up at $50?
Isn't it $0 at 24 months?
Mr Matt
join:2008-01-29
Eustis, FL

Mr Matt

Member

Re: ETF

said by ttiiggy:

Why does their graph end up at $50?
Isn't it $0 at 24 months?
I asked myself the same question. I believe the reason is that they have the customer by the calls. The customer should not have to pay a $50.00 ETF if they disconnect their service one day before their contract expires. I also ask myself why the wireless carrier locks the phone and claims that it belongs to them. When the phone stops working the wireless carrier claims it is yours and that it is your responsibility to pay the cost to repair it.

Jolene987
@comcast.net

Jolene987

Anon

$5.00 a month isn't a lot but it's something. If you decide to cancel 18 months into your contract your looking at saving $90.00 if you don't like it then when you cancel pay the entire etf.

tc1uscg
join:2005-03-09
Gulfport, MS

tc1uscg

Member

I've always felt the plans should cost the same but if you wanted a phone and not enter a contract. PAY FULL PRICE. Any moron can do the math. Don't mind being in a contract? Get a cheap or free phone and be stuck. Though I applaud the providers trying to keep the FCC out of it by coming up with their own ETF plans, this wouldn't be a issue of people who want a treo this month, to pay the 500.00 for the phone and 2 months later, want a different phone or want to jump ship to another provider. IT's pretty simple but as idiots we all are, we expect a free phone (as it's a god given right) and cheap to nothing cost for the service. And the first time some CSR doesn't bow down to lick our feet, we start a website telling people how bad they are, yada yada yada.. No one is going to admit it but thats pretty much the way it is. We are SO American.