Consumer’s Corner: A Few Words About…Cell Phone Contracts

I talk to people all the time about legal issues, and a few weeks back I asked our readers on our Facebook page if there were any issues they were interested in seeing discussed on this blog. As expected, several of the readers stepped up to the plate. One reader asked me to do a quick discussion of cell phone contracts. Before I get started on this subject, just a quick note: this, just as much as the other posts, is not legal advice. In fact, a lot of consumer legal subjects don’t reach the realm of “legal advice.” A little practical thought, and understanding plain language and the ways of big corporations, will go a lot farther than any statute I can throw at you.

Cell phone contracts (not the month to month variety) all have a few things in common. They are usually 2 years long, and they usually have various fees and charges for data, minutes, and other features. They also have a big cancellation fee, usually upwards of $300, if you try to get out of the contract before the end. This isn’t usually a problem, until carriers try to raise some of the miscellaneous fees in the contract. In that case, how do carriers get away with it, and how can you fight back?

Typically with these contracts you have the right to cancel without a termination fee when there has been a “material change” to a contract. It’s not entirely clear what that means, but a substantial increase in a fee for a service such as text messaging might well qualify. In any case, it’s certainly something you can bring up when calling customer service in an attempt to get out of a contract. If you threaten to cancel, carriers will often grant some pretty substantial concessions on your monthly bill. You may not get the original increases rolled back, but maybe you can get some more minutes or text messages. Just be aware that if the carrier refuses to budge on your argument, and you do cancel, they will charge you the big termination fee. How can you combat that fee? That is a subject for another column.

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