Groups Ask Operators to Cut Early Termination Fees

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Responding to a request from several consumer groups to waive early termination fees for people who have lost their jobs, mobile operators said no, although not so succinctly.

On Tuesday, Consumer Action, the Maryland Consumer Rights Coalition, Media Access Project and the National Consumers League sent letters to all of the major wireless operators asking them to let people who have been laid off cancel their mobile subscriptions without termination fees. All of the large operators require subscribers to pay, typically on a prorated basis, if they cancel short of the full term of their contract.

Some people may find themselves locked into a service plan they can no longer afford, but they also may find it difficult to pay the termination fee required to cancel the service, the groups said. People who have signed up to family plans, which offer lower rates for multiple phones, have to pay even more, they said.

AT&T and Verizon had a similar response to the proposal. "What we say to customers is, if your situation changes, whether it's economic or otherwise, and you need to look at your wireless options, just give us a call and we can take you through alternatives that might make sense," said Mark Siegel, a spokesman for AT&T.

"So they can get the most from their wireless service and use it when times get tough, Verizon Wireless can provide its customers with options and alternatives if and when their economic situations or wireless service needs change," said Tom Pica, a Verizon Wireless spokesman. "We handle such situations on a case-by-case basis."

However, neither of the carriers offers to waive the early termination fee.

AT&T customers can move to a less expensive plan or go to prepaid service without incurring fees, Siegel said. "The only way you pay an early termination fee is if you leave AT&T," he said.

Verizon will let customers move to a less expensive plan and assist with a payment schedule if required, Pica said.

Sprint said it has no plans to waive its early termination fee for unemployed people.

CTIA, the wireless association that represents mobile operators, reiterated that the operators work with customers on a case-by-case basis in the event of a change in situation. It also noted that their policies apply to a wide array of consumer hardships, such as military deployment and illness, in addition to job loss.

T-Mobile did not respond to a request for comment.

Early termination fees have been a hot issue in the mobile industry. After a series of lawsuits, all of the nationwide mobile operators now prorate their early termination fees so that customers pay less the closer they get to the end of their contract. While customers complain about the fees, operators argue that the fees allow them to offer people lower rates when they sign up for contracts.

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