Monday, October 16, 2006

How to get out of a cell phone contract so you can get an iPhone!

I was looking at different ways to cancel my cellphone contract with Cingular just in case Apple decides to be an MVNO [Mobile Virtual Network] for the iPhone. There is speculation that Apple will choose one of two different paths. Either they will have the iPhone exclusively on Cingular (at least in the USA) or they will have their own Network by leasing time from a major carrier but handling all the contracts and customer service themselves. Most likely, Apple would have kiosks in malls, sell service at Apple stores, and possibly even have stores within a store at Cingular locations.

I have a hard time figuring out what would be best. I think Apple is having an issue with what to do regarding being an MVNO vs going with a national carrier as well.

Regardless, I would like to provide you with a few tips for getting out of a cell phone contract just in case the time comes soon that you have to switch:

Complain due to lack of satisfaction. Say you want out because the service isn't up to par. (And really, is it?) Then back that up by filing official complaints online with the Federal Trade Commission and the Better Business Bureau.

Try a market-based fix. Some companies such as match unhappy mobile customers with people who'd like to sign up - at a discount, of course. You'll pay a $20 fee to sell your contract on the block.

Hidden charges. Look for your provider to bury changes to the Terms of Service within your bill. Quite often providers modify their service plans, much of the time the modification is a benefit. It doesn't matter, this voids the previous contract. Read the small print on those inserts included with your bill, it will spell out that you have 30 days (may vary on where you live) to cancel your contract with no charge simply because they changed the contract.

Move or get a virtual address. Study your provider's coverage map and find a town (maybe in Alaska?) with absolutely no service. Then tell the company you're moving there. They're not legally required to cut you loose, but frustrated consumers have reported success.

The known bad. Get a known problematic phone, complain 3 times, be let out of a contract due to your local lemon law.

Join the Army. Some people have finagled their way out of a contract when they just got orders to ship off to Iraq.

Shrink your plan. As a last resort, cut back to the bare minimum the provider allows and drop any frills, like picture-messaging. Depending on the number of months you have left, this could be cheaper than paying the typically prorated termination fee, which can often run up to $200.
Make them pay.. Many people have reported success by making the cellphone company pay money each month instead of making it.

Free Roaming. Most phones come with free roaming now. But it's not actually free. The company pays it for you. So all you do is go to an area that roaming(and when you have free nights or weekends) and place a long (5 hours?) phone call to "Moviefone" or something along those lines. This will start adding up for them in the fees they have to pay to the service provider in that area and they will kick you out of the contract. Too bad.

* Thanks to this WikiHow article for the majority of the wording for this reference, which I contributed to and helped revise.

Those in Europe, for the most part don't have this problem because they are not required to have a contract.


Anonymous said...

As usual, pretty US centric view, what's this "with Cingular, especially in the USA", nobody outside the USA even knows about Cingular. And yes, in Europe we also have contracts, they just don't look like a hanging rope. Sheese, you'll never learn...

FYT said...

My brother lives in London and has Cingular .... the implication was really about GSM phones. This is the prevailing technology in Europe. When I was there a few years back and when a friend of mine was there last month, we found out all one has to do is get a SIM card and a prepaid card and you're good to go even for international calls.

Cingular is in parts of Canada, Latin America and Soth America for your information. They also have technology and licensing partners in Europe, Asia, and Africa.

For your reading pleasure:

Anonymous said...

Why is it that everytime someone writes an article that can only apply to the US, someone gets all worked up about how US-centric it is? Not everything can be universal.

I enjoyed the read, thank you.

FYT said...

I agree ... and besides, I'm in the USA. ;-)

Anonymous said...

"Fix your thinking", indeed. How about just honoring the contract you signed -- you know, the one you're trying to break. It has an escape clause called an Early Termination Fee. Pay it and you're out. Especially since some of the so-called "outs" you suggest don't have a snowball's chance of actually working... the cellular companies aren't nearly as naive as you are and they've seen all these scams before.

FYT said...

The early termination fee can be as high as $400 and usually that's per line.

If the iPhone is in the $400 ballpark as I think it will be, this means that an iPhone would cost anyone not on the same network $800 to get an iPhone!

These aren't scams, at least one method can usually apply to 90% of the population.

I'm not encouraging dishonesty here ... I'm just giving potential buyers some more frugal alternatives.

Anonymous said...

well some of these phone contracts with so called rebates are scams...

TigerDirect at the BBB...
"... Based on BBB files, this company has an unsatisfactory record with the Bureau due to a pattern of unresolved complaints ..."

I'm one of the unlucky ones to have bought 2 palm treos that didnt get the $150x2 rebates

FYT said...

That in and of itself could be reason to break a contract as well ... if you complied with the terms of the rebate ... then they did not fulfill their obligation to you.