How To Get out of your Cell Phone Contract

6 years ago

Are you stuck in a cell phone contract? Have you been told that it will cost you $175.00 per line to terminate your agreement?

Good news! You can escape your cell phone contract without paying an early termination fee (ETF). In fact, it’s not difficult at all.

What follows are 4 strategies for extricating yourself from the clutches of your contract. The first option fits the “it’s not difficult at all” description, while the other three are more situation-specific.

Here Are Your Options:

1. Give Your Contract to Someone Else

The fact is, cell phone carriers allow you to swap your contract with someone else, but they certainly don’t go out of their way to let you know this, nor do they help you with the process. Websites such as CelltradeUSA in the U.S., and Cellswapper for customers in the U.S., Canada and the U.K., match people trying to escape a contract with those looking for one.

The process is simple and straightforward. You sign up and post your contract offer online, which usually involves selecting the name of the carrier you currently have, entering your contract’s start date and adding any additional incentives you feel might sweeten the deal, such as your current phone or a small cash bonus. These websites then act as matchmaker, and take care of the all transfer details.

In most cases, these websites only charge a small, one-time fee for those looking to get out of a contract, and are often completely free for those looking to enter into one. Policies vary, but generally the fee is for unlocking your mailbox so you can view offers, or for the cost of setting up your ad. Either way, it’s a small expense, especially when compared to the hefty ETF you’ll avoid paying.

Generally, people looking to get out of their contract still want a phone and service, so these sites can also match you with alternative options that may better suit your needs. And if you do assume someone else’s contract, you also avoid those pesky activation fees. Bonus!

2. The Grass Is Greener Method (For U.S.):

Some major cell phone carriers in the U.S. are now offering to actually pay your ETF’s if you switch over to their service.

In the U.S., T-Mobile’s “Un-carrier 4.0” promotion” offers to pay up to $300 per line toward ETF fees, and up to an additional $300 for your trade-in. However, to qualify you must currently be a Verizon, AT&T or Sprint customer.

Also in the U.S., AT&T is offering a somewhat more byzantine promotion, whereby if you are a T-Mobile customer you can switch and receive a gift card valued up to $250 for your old T-Mobile phone, and $200 for each line you switch over. With the AT&T offer, you still pay your ETF, but when the math all shakes out you end up much better off than if you cancelled service with one carrier and began with another.

Taking advantage of such promotions may make sense if your concern is over poor customer service or call quality. In that case a change may really help. However, unlike the first option discussed, you will still end up in a new, two-year contract.

Also, in the case of the T-Mobile promotion, while they say you can receive “up to $300” for your old phone, you can be darn sure that very few handsets will actually command such value. So weigh the pros and cons carefully.

3. Blame It On Dropped Calls

Another approach that can be useful in certain instances involves putting on your diplomat hat and presenting your case directly to the carrier. For example, if you are experiencing too many dropped calls in your calling area, the carrier may be willing to work with you. (And as for dropped calls and poor service areas, make sure you intentionally place a lot of calls in areas which you know to be dead spots. It can’t hurt your case if and when they check the call history).

Still another situation where contacting the provider can help involves military service. If you are going to be stationed overseas at a location where no service is provided, the carrier may waive your obligation. Of course, you’ll want to have the proper documentation.

If you want a contract waived due to the loss of a loved one, pleading your case to a supervisor may work. Again, proper documentation will be needed - in this case a death certificate.

4. The Material Adverse Clause

All cell phone contracts have their variation of a material adverse clause, a stipulation that basically says that should a change occur that alters the terms of your agreement in an adverse manner, you have the right to opt out. Much has been written on the internet about this clause, and there is a significant amount of anecdotal evidence indicating both success and failure with this option. What is true is that whenever a change is made to your cellular agreement the carrier must inform you.

You then have a specified period of time to respond. It would be during this grace period that you would need to contact the carrier and state that you do not accept the change(s) to your contract and wish to opt out.

To give yourself the best chance of success employing this tactic you’ll want to bear in mind five things:

1. Find the change first: When your carrier makes a change to your agreement they must inform you. However, it may be buried in your monthly bill, or sent as an email that may get trapped in your spam folder. You need to locate it first. So be alert for changes; carriers will not go out of their way to display them.

2. Do not be adversarial when presenting your case: This isn’t the time to show customer service that you are a master of legal jargon. Instead, be concise and respectful.

3. Talk to the right person: When you contact customer service, ask to speak to a supervisor. Stating your case to the first person who answers the phone is a complete waste of time.

4. Have your paperwork ready: Have the contract change information available so that you can refer to it during the call.

5. Invoke the phrase “material adverse clause”: After you state your case to the supervisor, explain that the contract change adversely affects you and that you would like to terminate your agreement without incurring any fees.

Of course, you can avoid a cell phone contract commitment altogether by buying your phone at full retail. After all, everything else we buy is non-subsidized, so why not our phones? While it costs more up front, you own the device outright and can sell it without conflict should you choose to upgrade later...and begin the process again.

Update: Some Good News For Canadians

On December 2, 2013 the Radio-Televison and Telecommunications Commission (CRTC) created a new Wireless Code which, among other things, reduces the three-year contract to two years. While it remains to be seen how this will affect subsidized pricing, Canadian cell phone customers can breath a sigh of relief that their obligation to their carrier is now only 24 months.

Final Thought

All carriers offer a grace period when you sign a new contract. Ask how long the grace period is, then put your new phone and carrier through it’s paces in the first several days to be sure you are satisfied. Place calls from lots of different locations that matter to you. Call customer service and see how you are treated. Get to know the phone to see if it’s really what you had hoped it would be. Then, if you are not satisfied, you can avail yourself of the grace period and back out before it’s too late!

As always, we want to hear what you think. Let us know your thoughts and experiences in the comments below.

  • Chris_34659 6 years ago