Proposal May Cap Cancellation Fees On Cell Phone Contracts.

Interesting stuff here…The government is quietly negotiating to help cell phone customers avoid expensive fees when they cancel contracts with wireless companies, as the Federal Communications Commission is considering a plan that would cap cancellation fees for cell phones. Finally!

Cell phone companies routinely charge customers $175 or more for quitting their service early. Under a proposal to the Federal Communications Commission, the wireless industry would give consumers the opportunity to cancel service without any penalty for up to 30 days after they sign a cell phone contract or until 10 days after they receive their first bill. The proposal also would cap such fees and reduce them month by month over the course of a contract based on how long customers have left, according to people familiar with the offer speaking on condition of anonymity because the FCC has not accepted it. The plan would not abolish cancellation fees entirely.

What do you think? Is it about time these fees get reduced? I don’t even think they should exist in the first place, but I will take what I can get!

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Comments (7)

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  1. Patrick says:

    I think almost $200 to cancel is very high. But it is in the contract and people sign it, so it is legally binding. I think a prorated cancellation fee is more fair.

  2. david says:

    Hopefully they can get the contracts changed. 😉

  3. DebtDieter says:

    I’m shocked you don’t already have prorated cancellation fees over there?

    Cancellation fees are a necessary evil (I work for a phone company here in Australia) as setting up and activating a new customers costs us money, and it’s usually to support the discounted or free handset subsidisation costs.

  4. david says:

    Just a few companies are starting to have prorated fees. They should get rid of free and/or discounted phones, as A. it would get rid of the fees and B. there would be a lot less e-waste to deal with as people would not just throw out their phone every 4 months for a new one!

  5. Jorge Silva says:

    In Portugal, after you sign a (normally) 12 month contract with a cell phone company you have to stick to the contract otherwise the company can charge you a fee equivalent to all the monthly charges up till the end of the contract.

  6. Mrs. Micah says:

    I like the idea. A small part of me wonders whether the government needs to regulate this sort of thing, but if they consider it an unfair business practice (and I hate it) I wouldn’t mind having them step in.

    I like the prorated idea…because if you cancel early then it’s just their way of making up for your sign-up benefits (deals on phones and the like). But they certainly make it back. And unlike leased homes/apts, cell phones aren’t something that might lie vacant for months before the owner can find another tenant. Once the company made its money back from the initial benefits they’re not risking anything.

  7. Vince Wylde says:

    The fact is, there is no reason for the penalties whatsoever. If you provide a decent service, you will not lose customers. This fee is completely unnecessary other than to keep these bastards content with providing mediocre service because they are guaranteed at least 2 years of your business. For bonus points, try this: Cancel your contract midway through citing tragedy and major change of lifestyle as a reason, and then offer to make monthly payments until it’s paid off and be told, pay the balance in 3 months tops, or you go into collections, and oh by the way, sorry about your dead mother… Life sucks, pay up.