The elderly lady was upset. She was being charged over $300 to get out of a contract with a company she said had a poor product and terrible service. When I asked her what she had agreed to in the contract, she couldn’t remember. Didn’t have a copy anymore. Uh, oh…
Can they do that?
The BBB can’t answer legal questions. We don’t know the law and can’t give legal advice. Your State Attorney General’s office and/or the Federal Communications Commission (FCC) are usually good resources for these queries.
Here’s what I do know: You have the most power before you buy long-term services which may include an ETF (early termination fee):
- Cell phones
- Satellite TV
- Health club memberships
- Cable TV
Therefore, it is best to do your homework thoroughly before signing anything. What’s the company’s reputation? How good is their service? Do they pro-rate fees over the term of the contract? At what rate do they decrease? (This will vary.)
The FCC’s Consumer Task Force offers these tips:
- When signing up for a new cell-phone service, make sure you are fully aware of any ETFs.
- Ask how much the early termination fee will be and how it is prorated.
- Ask if it would be possible to buy a handset at full price and avoid an ETF.
- Think before you make any changes in your contract, such as buying a new phone or more minutes that your carrier might offer.
- This could trigger a new two-year contract with another ETF.
- Ask about the trial period during which you can cancel the service without an ETF penalty. This is typically 14 to 30 days.
- If you use your phone sparingly, consider avoiding the whole ETF issue by buying a pre-paid phone. These phones do not involve a contract.
Feel you’ve been had? File a complaint at http://www.bbb.org While the BBB can’t help either party to break a contract in which no misrepresentation nor deception is alleged, we’ll take a look at it. You can also let the FCC know about your experience here.