SubscribeBlame those eBay bottom feeders, suggests the mobile industry press, for Verizon Wireless’ decision to double the early termination fee paid when breaking your cell phone contract.
Effective November 15, customers will face the $350 early termination fee for select phones sold on contract. Each month the customer remains with Verizon Wireless, the fee drops by $10.
It seems those seeking out some of the hottest new phones, including the Storm 2 and Droid, aren’t keeping them. They are signing up as “new customers,” getting phones at a substantial discount, and then immediately canceling. Even with the current $175 early termination fee, they make a handsome profit reselling the phone online for more than $500.
Some have reportedly done this repeatedly, costing Verizon Wireless a pretty penny on generous phone subsidies for new customers, and they’re doubling the early termination fee to discourage some of the reselling.
Verizon Wireless is not the only company facing the reseller challenge, so expect other national carriers to follow suit soon enough.
Of course, the prospect of paying more than $300 is also likely to keep a lot more customers with Verizon Wireless. Unless the service is a complete catastrophe for the customer, most will probably wait out their contract instead of paying the steep price for the privilege of leaving.
A typical eBay sale for the Storm2, which looks suspiciously like a "sign-up and cancel" transaction for eBay resale.
Want to get out of your contract with Verizon and still not pay an early termination fee?
http://www.wonderhowto.com/how-to/video/how-to-get-out-of-your-verizon-contract-without-a-fee-223441/
Ok I can see their point but why not require the phone to be returned in mint condition of better yet because each phone has its own unique ID turn that phone off from the system. If it can not be used it has no value. Or do both.
I can understand Verizon’s issue here. Not that I am a fan of any wireless carrier. But I think the real issue here is why new smart phones cost as much or more than a high end laptop? Also, we know how much these phones retail for (without a contract) but what are the wireless carriers actually paying for them?? I’m guessing the carriers pay considerably less than retail (I’m thinking at least 50% less or more) and therefore aren’t really subsidizing them all that much. I’m thinking the whole thing is a scam since I see no reason a… Read more »
The phones definitely don’t cost as much as they say they cost retail. They artificially inflate the cost of the phone so you will have to sign a 2 year contract. If you look at most of their phones, the price without contract, most are $300 or more in price. How many people have that kind of money laying around just for a phone? And what about a family. If you bought phones for the whole family at the no contract price, you would have to fork out over $1000. The cellular phone business is the biggest racket going today.… Read more »
Here is a story along the lines of Tim’s reply: I just got a new smart phone from Verizon. I chose an outdated phone (Verizon still had a couple left) the Verizon vx6800 (HTC Titan). I picked this phone because it was one of the last two smart phones that Verizon doesn’t force the mandatory data plan on. I just wanted a wi-fi phone. The Samsung sch-i760 is the other. The story that they give for the mandatory data plans is that too many people were accidentally accessing the data network and incurring huge bills. After I got the phone… Read more »
I got a Samsung Rogue. Verizon has crippled this phone so much it isn’t even funny with their Brew software, which is the worst software in existence. I tried putting Opera on the phone, that didn’t work. Try to download mp3’s from email, no go. Try to go to any place besides Youtube to watch video, ie hulu, no go. Samsung made a great phone but Verizon destroyed that. Don’t get me started on how many times they have over charged us on our bill, 3 months in a row now! I guess they think most people won’t bother looking… Read more »
We already know that the prices they quote as “regular” are often the manufacturer’s suggested retail (list price). The American cell phone industry model is to hand out subsidized/free phones to consumers as an incentive to lock them into two year contracts, and be justified in locking down the phones to divert customers into provider-only add on services, from which they earn considerable revenue. Abroad, people pay retail price for unlocked cell phones they can take to any carrier, and most keep theirs longer than two years. In this country, two years means a brand new phone for free or… Read more »
The Wireless racket gets worse by the day
Actually I see this as positive sign. More people will learn that there is no free phone here. Most of the USA consumers have been brainwashed with advertisement for saving money by bundling service with your phone. But anyone who ever took an economic class and did not slack through it knows that vendors makes those bundles in order to maximize their profits not to save you money. The good news is that the more they maximize their profits the more opportunities for opportunistic people to make quick buck by exploiting the system. Just like the piracy flourished because the… Read more »
I too have a LG chocolate and have the same complaints about it as Phil. I would love to get a new phone, particularly one like the droid, with its camera, media playback and other user function improvements, but not with a data plan. I have no desire or intent to be forced to pay for a data plan that I will not use, especially at their exorbitant prices. I also don’t have any intention of picking one up just to jump ship and sell it for a profit, I have the parents on our family plan and wouldn’t put… Read more »
Sounds like everyone should go to T-Mobile then. Seriously, T-Mobile has extracted the subsidy of phones on their contracts so that if you pay retail price for your phone you don’t pay for it over the life of a contract. As in, there is no contract. Their phone pricing contract-free is even somewhat reasonable. You can get a smartphone for $400, or $20 per month over 20 months. Alternately, you can pay $90 for a basic phone. Or go prepaid on any other carrier. Straight Talk offers Verizon coverage, unlimited everything and a $45 price point. The catch: yyou pay… Read more »
I think the thing to keep in mind is not the retail price for the phone as a measure of how much Verizon is subsidizing the phone. Verizon buys these phones in mass at a very much lower price than retail. I wouldn’t be surprised if they had 50% profit or more tied into the phones. Also, they want the prices sky high so it forces you into a contract. Another thing, is the branding of the phone. You supposedly pay for the phone yet it really isn’t yours is it? I mean Verizon puts software on the phone to… Read more »
Yeah, Verizon’s not exactly a “Green” company. And what happened to the promise of a more open network? Sure, they now have a droid phone, but they stated they would open up their network during the new spectrum bids, how exactly do you get another phone on their network, or vice versa? I’ve been off contract with Verizon since the middle of last year. In fact, I’m still on their old Americas Choice plan because I refuse to sign a new contract by moving to the new plan, it doesn’t offer any more benefits anyways. I’m going to remain off… Read more »
Lucky you. I was on that plan and I wanted to set up the parental controls. And they said I had to switch to a DATA plan (to be charged by MB) Well 2 days later (after looking at the features they had for parental control) I called them and told them I wanted back on my old plan (btw rep told me I could switch back) And they said oh sorry we dont offer that anymore, All of our plans are charged by MB usage now. (Why I left sprint) Yes and TMOBILE rocks. I was with them for… Read more »
ENVY Touch best phone from verizon. BTW 🙂 I hated the chocolate.
Touch is good but not as good as the xv6800 – touch screen and full size keyboard with wi-fi and pocket pc abilities. $49.95 new every 2. Amercia’s Choice $39.95/450 and no data plan. It also has a GPS radio so once you unlock it you have free GPS system as well. SPB mobile shell UI is very cool Windows Mobile add on – looks up my contacts on Facebook and auto pulls their picts into my contacts.
Regarding the new Droid – this is so f’d up it is funny: “Tom Bradley reports in PC World that the new Motorola Droid smartphone will cost users $199.99 with a 2-year contract, with an additional $30 per month for the mandatory ‘unlimited’ data plan that has a monthly cap of 5Gb. Verizon will charge $50 for each additional gigabyte over the 5Gb limit on the unlimited data plan. Verizon has confirmed that tethering will cost another $30 per month for an additional unlimited data plan that is also limited to 5Gb. If you want tethering you will pay $60… Read more »
Yep, sounds like Verizon alright. For real, I would feel better if they just pulled a gun on me and demanded the money. At least then, I would know I am getting robbed.
Who needs to sign a contract to get on Verizon?
Not me!
I’m very happy with Straight Talk and am impressed with their coverage on Verizon.
To me, the $30 – 1,000 minutes, 1,000 texts deal is unbeatable. I travel and have never had a problem.
When I had Metro POS, it worked fine in town but as soon as I got outside the city, fuhgeddaboutit!
You get what you pay for, or in the case of Straight Talk, MORE than you pay for!
Verizon, baby!