Dumping your current mobile service provider isn’t always as simple as calling up and cancelling.
If you’re still under contract or owe on a phone financing plan, you might find a nasty surprise on your final bill called the Early Termination Fee .
Early Termination Fees (ETF's for short) add up... and they can add up fast.
Especially if you have an expensive mobile or multiple lines.
So What Is an Early Termination Fee Exactly?
When a network gives you a discount on a phone or allows you to make payments, they often require a contract in exchange.
In most cases, these contracts are two years long. Networks use this to ensure that they make back the money they gave you for signing up.
According to Wikipedia:
An early termination fee is a charge levied when a party wants to break the term of an agreement or long-term contract. They are stipulated in the contract or agreement itself, and provide an incentive for the party subject to them to abide by the agreement.
Just because the network gave you a shiny new mobile for $10 doesn’t mean it costs $10. The network paid the remaining balance.
If you cancel service before you contract is up, early termination fees reclaim the money they contributed toward the cost of the phone or other discounts offered to you when signing up.
Fees vary depending on your network, account features and other factors. However, most networks have support pages on the topic or spell out the exact steps for calculating your ETF in their terms of service.
Looking to avoid the number crunching? Call customer support. They must provide you with a total should you want to weigh the cost of leaving your network early.
When Do I Need to Pay ETF Fees?
ETF fees most often apply in one of two scenarios:
You cancel service with your existing provider before you contract is complete.
You don’t pay your bill long enough that the network ends service and your contract.
It’s hard to accidentally incur an early termination fee. But there are rare occurrences (such as an error porting your number between networks) that might cause an unexpected termination of your service.
In these instances, you might call customer support and work things out.
However, in most cases, once they issue an early termination fee, you’re stuck paying it.
If you don’t, it might impact your credit.
Worse still, they can also blacklist your mobile . Then you’re stuck finding a new phone on top of a new network.
How Much Is The Early Termination Fee?
Your early termination fee depends on the number of lines you have on your account, the mobiles on your account and sometimes even your monthly tariff.
The government regulates early termination fees in most regions. But despite these regulations, they can still pile up fast.
This is because termination fees apply to each line on your account.
If you have a family plan with 4 lines, you could end up owing hundreds of pounds should you cancel service early.
Current ETF fees for UK Networks include:
|ASDA Mobile||No ETFs|
Costs will range between £6.25 to £70.75 per remaining month.
You can cancel Family SIM cards without fees if you've met the minimum 30 days of line rental
If you're on a Pay Monthly handset plan, fees will vary based upon the handset you purchase. You can find more information in the price guide linked above.
Total fee is equal to your remaining monthly payments, minus vat, reduced by 4%.
Total fee may be as high as the remaining monthly line rental charges (less avoided costs) for any remaining Minimum Period.
For O2 Refresh plans, you must pay the full balance remaining on your Device Plan.
For non-Refresh plans, you must pay 83.3% of the remaining monthly charges.
|Plusnet||As Plusnet's SIM-only plans include a rolling 30-day window, you can cancel at anytime with 30 days notice. You'll pay in full for the remaining 30 days.|
|POP Telecom||Total fees are equal to your monthly plan multiplied by the months remaining in your Minimum Term.|
||Sky Mobile||Early Termination Fees for Sky Mobile depend on the plan you choose. If you cancel before you contract obligation is complete, you'll pay for each month remaining.
Costs vary from £1.65 to £23.14 per remaining month.
|Talk Mobile||Total fees are equal to your monthly plan multiplied by the months remaining in your Minimum Term.|
"If you’re leaving before the end of your contract then fees will apply... [the fee] will never be more than your monthly subscription price multiplied by the number of months remaining on your contract."
Total fee is currently 80% of remaining monthly charges for your minimum term period.
However, Three notes in their Plan Price Guide that the discount is subject to change.
|Virgin Mobile||Total fee is equal to approximately 44% of the remaining monthly charges through the Minimum Term of your contract.
However, they note that they reserve the right to alter the percentage based on usage and to reflect changes in their costs.
|Vodafone||Total fees equal your outstanding line rental, without VAT, less a 2% rebate. Additional discount may apply on a per-line, per-contract basis.|
How Can I Avoid ETFs?
The simplest way to avoid ETFs is to avoid contracts .
It might cost more at first, but by avoiding fees like these, you’ll likely save money over the long term.
If you recently signed up for a new contract, networks must give you a full refund within 14 days of starting service should you want to cancel for any reason. However, you must return any equipment in like new condition if you received a subsidy or lease agreement.
This means you might still have an easy option to get from ETFs before it’s too late.
However, for most readers, you’re probably already on a contract.
If you don’t want to pay it, you can try lowering your plan to reduce your monthly bill and letting your contract finish.
Be sure to check the terms of your contract. If you lower your bill too much, it might not count toward lowering your ETF anymore.
Getting Out of Your Mobile Phone Contract
While most options won’t work overnight, with a little time, you could find yourself free of your contract and fees.
Early termination fees might be a hassle, but as long as you fulfill the terms of your legal contract, you won’t need to worry about them.
If you’re looking to avoid ETFs, skip the next upgrade your network offers and buy a unlocked phone outright . You can find unlocked options on sites such as Amazon that fit the needs of most users for around £100 to £200.
Should your budget allow, we think the upfront expense is well worth the freedom and lack of fees down the road.
P.S. While SIM-only plans are a popular way to avoid ETF concerns, don't forget to check into PAYG deals. These plans are increasingly competitive as carriers look to hold on to customers and offer options for those with less-than-perfect credit. You'll still need pay for a phone upfront unless you have a supported phone already but for light or casual phone users, PAYG plans offer a great value.