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story category AT&T Launches Pro-Rated ETF System
$5 reduction in ETF total for every month under contract
(old news - 11:34AM Monday May 26 2008)
tags: prices · business · wireless
Back in April I noted that AT&T will now be pro-rating their early termination fees. Just as a reminder: that new policy started yesterday. Instead of paying the previous $175 penalty no matter when you cancel, new and renewing AT&T customers will now see that $175 total reduced by $5 for every month they're under contract. Sprint, AT&T and Verizon all changed their plans after facing massive ($1 billion, in Verizon's case) lawsuits for misleading customers. The carriers are currently trying to wiggle out of those suits by lobbying the FCC.

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Forums » AT&T Launches Pro-Rated ETF System
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BuzzDar

join:2006-01-28
West Frankfort, IL

Just 5.00$$

I think it should be reduced by more than 5.00 per month

LiamJunket
Premium
join:2002-03-03
Ocean City, NJ
·Comcast

On typical 2 yr contract still pay $60 cancelling 1 mo early

The $5/mo plan is better than it was. But even with this new plan, you could still end up paying a $60 ETF if you cancel after 23 months on a 24 month contract.

$175 - (23*5) = $60

Now, anyone with some smarts wouldn't do that, especially if the monthly wireless contract price is less than $60, but it will still get some people who don't pay attention.
--
My BLOG .. .. Internet News .. .. My Web Page

kfsutops
Premium
join:2002-08-19
Brandon, FL
clubs:
·RoadRunner Cable

Re: On typical 2 yr contract still pay $60 cancelling 1 mo early

said by LiamJunket See Profile :

The $5/mo plan is better than it was.
That is the attitude that let's the consumer get screwed now. Complacency is what AT&T want from us.

I don't think there should be any early termination fees. Just charge full price for the phone and move on.
--
"There are no stupid questions, but there are a LOT of inquisitive idiots"

texans20
Weapons of Masturbation
Premium
join:2002-09-28
Texas!
clubs:

Re: On typical 2 yr contract still pay $60 cancelling 1 mo early

said by kfsutops See Profile :

said by LiamJunket See Profile :

The $5/mo plan is better than it was.
That is the attitude that let's the consumer get screwed now. Complacency is what AT&T want from us.

I don't think there should be any early termination fees. Just charge full price for the phone and move on.
AT&T and T-Mobile both have that option, you can pay full price and not be locked into a contract or you can bring your own GSM device.
--
"I sincerely believe the banking institutions having the issuing power of money are more dangerous to liberty than standing armies." Thomas Jefferson

joako
Premium
join:2000-09-07
/dev/null
·AT&T U-Verse

Re: On typical 2 yr contract still pay $60 cancelling 1 mo early

said by texans20 See Profile :

said by kfsutops See Profile :

said by LiamJunket See Profile :

The $5/mo plan is better than it was.
That is the attitude that let's the consumer get screwed now. Complacency is what AT&T want from us.

I don't think there should be any early termination fees. Just charge full price for the phone and move on.
AT&T and T-Mobile both have that option, you can pay full price and not be locked into a contract or you can bring your own GSM device.
They all stopped doing that years ago.
--
09:F9:11:02:9D:74:E3:5B:D8:41:56:C5:63:56:88:C0
Crookshanks

join:2008-02-04
Endicott, NY

Re: On typical 2 yr contract still pay $60 cancelling 1 mo early

said by joako See Profile :

They all stopped doing that years ago.
Not true. T-Mobile has FlexPay. If you bring your own phone or buy one from them at full retail you can get service without a contract. If you get a discount on the phone price then a contract comes into play.

kfsutops
Premium
join:2002-08-19
Brandon, FL
clubs:
·RoadRunner Cable

said by texans20 See Profile :

AT&T and T-Mobile both have that option, you can pay full price and not be locked into a contract or you can bring your own GSM device.
Of course they have the option, but the price it so that it makes no sense to that pay that price.

All cable companies are in bed with the cell phone makers on this. Do you really think that the cell phone carriers are really giving discounts here??? They have an extremely high mark up so they can appear to be giving a big discount.
--
"There are no stupid questions, but there are a LOT of inquisitive idiots"
Crookshanks

join:2008-02-04
Endicott, NY

Re: On typical 2 yr contract still pay $60 cancelling 1 mo early

said by kfsutops See Profile :

]Of course they have the option, but the price it so that it makes no sense to that pay that price.
Not if you know how to game the system.

With T-Mobile at least (and AT&T?) you can buy any "prepaid" phone kit that they sell and use it for postpaid service simply by swapping the SIM cards.

I got a replacement Motorola V195 for $30 this way. Would've been $100 to get it through the postpaid group. Works just fine.
EPS

join:2008-02-13
Hingham, MA

said by kfsutops See Profile :

I don't think there should be any early termination fees. Just charge full price for the phone and move on.
This is the disconnect between this board and what most people would think- I would guess most people would say (at least at first) that they'd rather have a risk of an ETF than a much higher upfront cost.
joker5656

join:2006-06-23
Greenville, SC
·Charter Pipeline

said by LiamJunket See Profile :

The $5/mo plan is better than it was. But even with this new plan, you could still end up paying a $60 ETF if you cancel after 23 months on a 24 month contract.

$175 - (23*5) = $60

Now, anyone with some smarts wouldn't do that, especially if the monthly wireless contract price is less than $60, but it will still get some people who don't pay attention.
i pay 42 dollars on average per month, i be better just paying out the last months bill,what a joke

tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
·Comcast


1 edit
said by LiamJunket See Profile :

.
Now, anyone with some smarts wouldn't do that, especially if the monthly wireless contract price is less than $60, but it will still get some people who don't pay attention.
This is about DISCLOSURE, as long as they tell you the terms, in a way a reasonable person can understand, you should be locked in.
some that don't pay attention will always be fooled.
if it was someone who's circumstances had dramtically changed, and they honestly could not afford to continue to pay, I could be somewhat sympathtic, but the majority of those complaining seem to want to get out, just to get the newest, shinest phone (toy) sooner.
There are costs to the lessor, above that which a straight 24mo/100% prorate would allow.
This isn't an interest free deal for people unwilling/unable to pay cash for the full price of phone plus the additional cost service in advance.
They aren't"fronting" you the phone for your benefit, it is to sell you on their continuing service.

n2jtx

join:2001-01-13
Glen Head, NY
·Optimum Online

Come On AT&T

Come on AT&T, break it down with real division; $175 / 24 = $7.30/month. That way when you get to month 23, you would only owe $7.30, not $60. You can't tell me that there is $60 outstanding between month 23 and month 24.
--
I support the right to keep and arm bears.

visio

join:2001-08-29
Clifton, NJ

Re: Come On AT&T

its the cost of the phone. regardless, you're notified of this charge when you open your account with them. i don't understand why so many people continue to complain about this. if you dont want to pay an ETF, don't sign a contract. the cost of the phone will be paid for
a) upfront, full cost, no contract
b) 2yr contract, carried out all 2 years
c) 2yr contract, with ETF if you cancel early.

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

said by n2jtx See Profile :

Come on AT&T, break it down with real division; $175 / 24 = $7.30/month. That way when you get to month 23, you would only owe $7.30, not $60. You can't tell me that there is $60 outstanding between month 23 and month 24.
If they did it that way they wouldn't make much off unhappy subs which is a no-no to cell phone companies!
--
When I gez aju zavateh na nalechoo more new yonooz tonigh molinigh - Ken Lee

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

Total Crap

Prorating the ETF is silly, as people can already get around the ETF by either buying a prepaid phone, paying full price for the phone, or roaming too much.

What AT&T should have done was include the price of all of its hidden fees in its advertised price instead.
--
This isn't fair! I was only supposed to hate just ONE presidential candidate!
nmarrion

join:2001-05-22
Los Altos, CA
·Pacific Bell - SBC

Sprint have not changed their plans!

Sprint have yet to make any change to the ETF as part of their plans. All they did is announce on 11/7/07 that they intend to do so sometime in 2008.

»newsreleases.sprint.com/phoenix.···ghlight=

NOCMan
Verizon Fios User
Premium
join:2004-09-30
Flower Mound, TX

1Billion? WTH

So people sign a contract that states 200 dollar ETF and they complain when they have to pay it? So a company is now liable for a billion dollars. That's about 1500-2000 people's jobs if a company like Verizon were forced to layoff to pay that debt rather than take a hit on their bottom line. Which today is more likely.

I do not like the idea of ETF's and I think it's wrong to force the consumer to pay for what is essentially a cost of doing business to obtain a replacement customer. Still understand what you're getting into and honor the contract. You're getting a discount on the phone and that's what the ETF usually covers. Do not want to pay a ETF pay retail price for the phone.
--
Mac Chatter
»www.macchatter.net
Kearnstd
Elf Wizard
Premium
join:2002-01-22
Mullica Hill, NJ

Re: 1Billion? WTH

i dislike the idea of ETFs on Renewed contracts. you are already customer and you are just saying i want to keep paying the company.

i thought ETFs where to help cover the cost of the cheap/free phone you got at sign up with the carrier.
--
[65 Arcanist]Filan(High Elf) Zone: Broadband Reports

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

Re: 1Billion? WTH

said by Kearnstd See Profile :

i thought ETFs where to help cover the cost of the cheap/free phone you got at sign up with the carrier.
Hell NO! its an additional and quite lucrative way to make money off unhappy subs
--
When I gez aju zavateh na nalechoo more new yonooz tonigh molinigh - Ken Lee

Andrew M

@btes.tv

Re: 1Billion? WTH

Honestly, no matter what people are never happy with anything they have. If a company gave everyone who signed up a free phone and then they turn around and cancel their service the company wouldn't be in business very long. AT&T 70 million customers X 175 per phone = 12,250,000,000. Hmm yeah that's a lot of money don't you think? Even though you think they phones are cheap AT&T does have to purchase those phones from whatever company that makes them at probably more than 175 a piece. I think people should just be an adult and either live up to their commitments or simply don't make a commitment at all. After all either you pay the full 175 ETF or after 23 months 60 which is saving you 115 bucks. Who would complain about saving 115?????

mikes60
Stop Socialism Now
Premium
join:2001-07-31
Boynton Beach, FL
·AT&T Southeast


1 edit

Re: 1Billion? WTH

As a long time veteran of selling to the carriers, I can tell you that the $175.00 ETF rarely covers the cost of the phone.

Customers want that free, or heavily discounted phone up front, and agree to a 2 year contract so the carrier can write off the phone.

Don't want an ETF- bring your own phone.

Anyone who brings there own phone, or buys a phone from a carrier should get an unlocked phone. If AT&T sells you a phone at an un-discounted price, you should be able to use it anywhere- on any GSM carrier in the world (as long as the frequencies are the same). Since I travel all over the world, I only buy a "world phone" that will work in Europe and Asia, etc. And these phones are unlocked so I can use local SIM cards- that are much more economical than roaming on my AT&T SIM card.

If you are on a 2 year contract and want a new phone after the contract runs out, don't go back to the carrier for a new phone and sign a new contract. Buy your own phone and stay on month-to-month with the carrier.

That way you keep control of what you want to do- not the carrier.

By the way, I do not agree with many other of the carrier's practices, but I do understand the need for an ETF.

Almost anytime you get free equipment from any service supplier, it comes with some kind of ETF. Or worse.
--
No good deed goes unpunished.
clickie

join:2005-05-22
Monroe, MI

I agree with your premise, but there is an exception that has happened and needs to be addressed.

People sign-up for service, pass the 30-day service out clause, and then the service goes to hell and there *is* no recourse. There is more than just empirical evidence that this has happened with all carriers, and the customer is just stuck. The carrier can blame it on whatever problems they so desire without having to do a thing -- the customer is under contract and without reliable service.

There are plenty of other circumstances where a customer can be held hostage by onerous ETFs and spotty service. I wouldn't mind the ETFs if I had a guaranteed level of service. But the carriers like to pass off wireless as a "it is what it is service" when it benefits them.

It would be nice to be able to purchase devices from competitive vendors and know that they are going to work. Verizon has my area covered and is very reliable, but where can I find CDMA phones? Verizon and their resellers, which is essentially only Verizon.

GSM phones are slightly better, but only slightly.


netwire
Premium
join:2001-04-27
Mooresboro, NC
·RoadRunner Cable
·Millenicom
·Sprint Mobile Broa..
·Vonage

In most cases you can buy a phone online, at a deeper discount than what you can get from signing a 2 year contract. The ETF is a BS fee, along side all the other "cost recovery fee's" that they make you pay. Not to mention the cost of text messaging packages that are horridly over-priced. If you think for a second that these mega companies are loosing money then think again.
--
World of Warcraft - My anti-drug.

Maggs
Premium
join:2002-11-29
Woodside, NY
·RCN CABLE

Bad Service

If you give me substandard service and I can prove you're giving me substandard service, I should be let out of the contract for free.

Take for instance, you buy a new PC that shuts off after 2 minutes of use, and it is brand new. Would that be acceptable if the PC maker charged you a $200 ETF for bringing back the piece of junk. Basically, ETF are designed to keep you locked to a carrier whether or not you get good service. If you get bad service, they got you by the balls anyway. ETFs are a pure cash cow for the industry. How hard is it to digitally provision a phone on a network.

Any company that has to tie you into a contract for their services and charge you an ETF is a company not worth doing business with. Quality of service and value of service should be the only deciding factors in a purchase decision.
--
NIL ILLEGITIMUS CARBORUNDUM!

visio

join:2001-08-29
Clifton, NJ

Re: Bad Service

wow. that example was a poor one. if my new pc turned off after 2 minutes, i would return it. but guess what, if i bought a phone and it turned off within 2 minutes, i would return it as well without having to pay an etf. 2min would be noticed well within my 30 days that i have to try out the service.

as for the etf, it's designed to recover the cost of the phone and gain profit. thats the point of any business, releive costs, and make profit. if you aren't willing to pay an etf, dont sign a contract saying you're willing to pay an etf.

MisterMarcus

join:2001-11-10
San Diego, CA

Re: Bad Service

*sigh*

The ETF is not a blatant attempt to get profit. It's a blatant attempt to keep customers from jumping ship. There's a difference.

I said it before and I'll repeat myself...there are customers out there who like to "window shop" - that is, jump from carrier to carrier testing phones and stuff. Carriers don't like customers who do that, they want loyalty and guaranteed income streams. I'm the kind of customer who gets to know the carrier BEFORE signing up, so I know what I'm getting into before I commit. I've been with T-mobile nearly 4 years now and don't plan to leave, even though Verizon has a better hardware selection to choose from. T-mobile is the most fair when it comes to plans, deposits, etc...the "Monayy" to quote Vince McMahon.

I think the ETF should be prorated, yes. I also think it should be pro-rated with 100% proportion to price as per previous example. But I don't blame them for applying the ETF nor do I think the answer is "go prepaid and pay full price of phone". If the phone hardware pricing were more in line with the TRUE value of the phone, I would support that option, but you can't convince me that any Nokia phone is worth more than $200. Sorry.

mikes60
Stop Socialism Now
Premium
join:2001-07-31
Boynton Beach, FL
·AT&T Southeast

Re: Bad Service

said by MisterMarcus See Profile :

*sigh*

If the phone hardware pricing were more in line with the TRUE value of the phone, I would support that option, but you can't convince me that any Nokia phone is worth more than $200. Sorry.
Phones are sold at a retail price, including the expected profit.

Are all phones worth the retail price? Probably not; just as a Lexus is probably not worth that much more than a Toyota Camry.

You can buy unlocked phones more reasonably on Ebay, or from other alternate sources. If you buy from a carrier, or conventional retailer- they will make a profit. So would I.

Since I'm happy with my carrier, I have recently bought 2 Blackberrys for $99 each- and signed for another 2 years on each account. That is far below the actual cost to the carrier.

I also have 2 unlocked phones which I bought on Ebay for a lot less than the carrier's regular retail price.
--
No good deed goes unpunished.

MisterMarcus

join:2001-11-10
San Diego, CA

Re: Bad Service

There's a difference between "making a profit" and using it as an excuse to ream customers.

A phone that took $125 to make should be priced around $200. That's fair enough I think. But the CEOs wouldn't be able to take home billion dollar profits. That's the trick.
Mr Matt

join:2008-01-29
Eustis, FL
·Comcast
·Embarq

The terms of wireless contracts should be reviewed?

If one reads their wireless contract, they will find they are not signing a bilateral contract but a unilateral contract written in the favor of the carrier. The most outrageous clause is the one that specifically states that the carrier does not guarantee to provide service. When a customer moves to an area where the carrier can not provide service the contract should be null and void. It turns out that in such a case, the subscriber is at the mercy of the wireless carrier to let them out of the contract. Except in the case where the subscribers cost is increased, the carrier can make any change to the subscribers plan at any time and the subscriber will have no recourse against the wireless carrier. That includes the carrier removing features from a plan. The EFT is just the tip of the iceberg when it comes to customer abuse. One thing that will benefit the subscriber is no longer automatically extending the subscribers contract for any change to their plan no matter how small. Some subscribers who believed that there contract was about to expire have found that their contract was automatically extended because of one of those minor changes. In reality the ETF should be prorated based on the months remaining on the contract divided by the term of the contract.

jjoshua
Premium
join:2001-06-01
Scotch Plains, NJ

AT&T's 'pro-rated' is like Comcast's 'unlimited'

$5 doesn't qualify as pro-rated.

»www.thefreedictionary.com/prorated

To divide, distribute, or assess proportionately.

Qumahlin
Never Enough Time
Premium,MVM
join:2001-10-05
united state

Miscommunication

I keep seeing people mention "just bring your own phone"...These days the phone has nothing to do with an ETF. Look at the iPhone, you pay full price for the phone, but any of the standard AT&T plans require a 2 year contract unless you sign up for a gophone type account.

The ETF stopped being based on the subsidizing of hardware quite some time ago.
--
Forum Posts:7500

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

Re: Miscommunication

said by Qumahlin See Profile :

The ETF stopped being based on the subsidizing of hardware quite some time ago.
I call it the "Jump ship penalty" which is quite lucrative!
these phones are bought in such bulk, i doubt the price they paid for the handset is as high as the ETF.
--
When I gez aju zavateh na nalechoo more new yonooz tonigh molinigh - Ken Lee
mobbo

join:2005-04-13
Denton, TX
·Verizon FIOS

Verizon ETF policy?

Can anyone enlighten me on the Verizon ETF policy?

My girlfriend and I have a 2 year contract with 2 phone lines on it that has about a year left before expiration, but my new job came with a company paid cell phone. So I want to cancel my line, which would save us about $50/month. I think at the time I signed with Verizon the ETF was $150, so the cancellation would save money in the long run anyways, but I am just curious to know if I may save more if Verizon has changed its policies as well.

mikes60
Stop Socialism Now
Premium
join:2001-07-31
Boynton Beach, FL
·AT&T Southeast

Re: Verizon ETF policy?

Supposedly Verizon started this around 1/1/2007.

"Verizon Wireless introduced a pro-rated ETF earlier this year, with its $175 fee declining at a rate of $5 for each month of the contract term that a customer completed".

But, a call to them will confirm this.
--
No good deed goes unpunished.

jimbo48

join:2000-11-17
Hayward, CA
·AT&T DSL Service
·EarthLink

Re: Verizon ETF policy?

A phone call to any of these cellphone guys is about worthless. They can tell you anything (and usually do) that you want to hear and send you on your way. You'll find out how careful and forthright they are on your next bill. I don't believe a word any telco, Cable or other service provider says over the phone. They're NOT to be trusted, their word is worthless. Their EULA TOS whatever you want to call it is not worth the effort to print out-they'll negate it if you even attempt to exercise something that may still be in it that gives you some semblance of a right.. They assume almost NO RISK for failure to deliver services (No SLAs with these cretins) They can blame anything and everything that goes wrong on conditions they have "No Control over" then turn around and charge you full price and screw you with an ETF if you dare to leave before the contract. They won't allow you to try them out legitimately. We wouldn't have such animosity towards all these different carriers service providers etc IF they were really honest and consumer oriented. Just my opinion people

trebzon

join:2001-09-03
Grandville, MI
·AT&T Yahoo


1 edit

Screw You AT&T

I hate AT&T more then any other company. Called them again today and they flatly denied this policy and want to rape me for the full $175 even though my contract expires July 20.

They don't care. I have a family plan that bills at $95 a month, two lines in my home for work that bill with DSL at $140 a month and a PC card plan that bills at $54 a month. So they won't cancel my $54 even with a reduced ETF and want to continue to screw me. They really could care less. This is the stupidest thing I have ever seen. Goodbye AT&T. You would have lost $54 in revenue but now you will lose $289 a month and there is not a snow balls chance in hell any of your sales gimmicks in the future will win me over again.

See ya and F off AT&T!

Andrew M

@btes.tv

Re: Screw You AT&T

It only applies if you start a new contract on or after May 25, 2008 or renew your contract or do an upgrade on or after May 25, 2008.
Forums » AT&T Launches Pro-Rated ETF System


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