Termination fees illegal?

Carl wrote:
> D wrote:
>> On Tue, 05 Aug 2008 17:38:24 -0400, George <george@nospam.invalid>
>> wrote:
>>
>>> Carl wrote:
>>>> XS11E wrote:
>>>>> http://tech.yahoo.com/blogs/null/99655
>>>>>
>>>> This is an example of cry-baby consumers shooting themselves in the
>>>> foot. While I'm not a fan of Big Business, I understand that early
>>>> termination fees are necessary in order to allow carriers to give
>>>> away the phones at highly discounted prices. They intend to make
>>>> the money back over the life of the contract. That should seem
>>>> obvious. It is, after all, the goal of business to make a profit.
>>> Sure, but they don't have to kick you in the face doing it. I accept
>>> the subsidy part but the phone companies were being awfully heavy
>>> handed the way they enforced the early termination fees and that is
>>> what rightfully got people mad. If the fee was say $175 and you
>>> canceled the day before your contract expired they dinged you for
>>> the full $175. If you canceled a day later you paid nothing. I would
>>> love to hear an explanation how that was fair and reasonable.
>> If you had contracted to have someone build you a house, would you be
>> upset if he got everything done "except that last window put in?"
>> surely you would expect him to finish what he agreed to, right? so
>> why should a cell phone company be any differantly? you agreed to
>> keep service to a certain point, or pay the etf. why is it so
>> "unfair" to expect you to do as you say?
>>
>> To answer your question with another question, how is it not fair and
>> reasonable to expect someone to do as they agreed to? Not almost do
>> what they agreed to, but actually stick to the agreement?
>>
> Exactly what I was going to say (well, maybe not 'exactly', but pretty damn
> close). I don't get posters like George who expect to be protected by Big
> Brother from every mistake they can conceivably make and feel they have no
> obligation to the terms of the contract they entered into. When you sign a
> contract, George, read and understand the terms of it. And live with it. If
> you feel you're not competent enough, don't enter into them. But let's stop
> whining about everything, shall we?
>
>
Since you mentioned my name please *explicitly* quote in detail where I
even said anything like that.

And let me ask you have you ever questioned a fee or negotiated a price
at any time. If so why did you do it?

George wrote on [Thu, 07 Aug 2008 15:52:43 -0400]:
> Todd Allcock wrote:
>> At 06 Aug 2008 11:54:23 -0400 George wrote:
>>
> But really this is a serious question, why would you even think of such
> a thing as questioning a fee? After all according to this thread
> everything a business requires of us must be fully complied with. Did
> you even sleep that night with all of the guilt?

You have a problem with reading comprehension, don't you.

According to this thread, if you agree to something then you should be
held to it.

If he didn't want to pay the fee to the car dealer and the dealer
wouldn't budge he was more than welcome to leave.

At 07 Aug 2008 17:10:37 +0000 Dennis Ferguson wrote:

> >> No- if you don't like the terms, don't do the deal. Most cellular
> >> companies offer alternatives to contracts- and not just prepaid,
> >> AT&T and T- Mobile offer their monthly plans without contract (you
> >> pay full price for phones, or supply your own.) Sprint offers (or
> >> offered) no contract plans for a $5/monthly surcharge.
> >
> > Verizon offers no-contract plans as well, they really don't want you to
> > know that but they do....
>
> Neither do T-Mobile and AT&T, apparently. Just three weeks ago I
> phoned T-Mobile CS trying to buy a cheap plan which allowed full
> international roaming (i.e. not Flexpay) with no contract and was
> told that, while a 1 year contract might be possible, getting
> new service without a contract was not.

True- T-Mo's no-contract plans are all under their "Flexpay" system, which
does lack a few full-service features, like international roaming (other
than Canada or Mexico,) call forwarding, and CSD (old GSM 9.6k "dial-up"
data- GPRS/EDGE is available on Flexpay.).

> And while I saw the press
> about no-contract plans from AT&T in January I've been by the
> company stores three times since then asking about this and no
> one there seems to have heard of it.


Or they covered their ears when it was mentioned! ;-)


> I also called AT&T CS a
> month ago asking about adding a phone to a family plan without
> a contract and was told this wasn't possible either (though they
> also may have a secret 1 year contract option). I can't find
> any reference to a no-contract option on their web pages either.

Nor can I. I haven't tried getting it myself recenly, but HowardForums has
a few lucky folks claiming they've signed up for it (usually after trying
at several stores!)

Back a thousand years ago, when I was a Cingular dealer (ok, the late 90's!)
the no-contract option paid $50, vs. the $300 my stored earned from a one-
year contract. Even in those days, the no-contract option was a well-kept
secret! (Though personally I pushed it whenever possible if a customer had
a working phone from their last carrier- I didn't need inventory for no-
contract sales, and they were never out of stock!) ;-)


> I'd also note that when I bought T-Mobile service in 2001, and
> again when I bought AT&T service in 2005, I had no need to or
> intention of buying equipment (I like to buy my GSM phones overseas
> so that I get software which can display Asian characters) but
> was told in both cases that I would be signing up for the same
> plans at the same prices with the same contract terms whether I
> took the equipment or not. Verizon, in 2005, also told me that
> buying a phone at full price would not avoid the contract for new
> service.


The official company line would be (and I'm not sue I'd necessarily
disagree) is that the policy gives you an "incentive" to take a new handset
guaranteed to be compatible, rather than discover your "generic" handset
has issues on their service, causing you to cancel. (Similar, perhaps, to
the reasons the satellite TV companies forced "free installations" on new
customers- even those willing, or even who preferred, to do it themselves-
historical data showed self-installers were many times more likely to churn
than customers with "professional" installations. Similarly, I'm sure
"bring your own handset" cellular customers churn at much higher rates,
making a forced subsidy and contract far more attractive to carriers.


> I hence think that the behaviour of the carriers, at least
> historically, has made the notion that the contract was a
> quid pro quo for a phone subsidy rather mythical.

Recent history might agree with you- further back, however, it was a quid
pro quo. My first cellular carrier ("First Cellular Omaha") offered no
contract plans, 90-day contracts and one year. The 90-day contract's
service plans charged a $5/month surcharge over the one-year rates. (So I
paid $20/month instead of $15 for my TEN minutes/month plan in 1989!)


> If you
> had to agree to the contract whether you took the phone or
> not then the quid couldn't have had much to do with the quo.


Fair enough... but I think a lot of that is attributable to store-level
policies and antics. Cingular in particular offered no-contract plans for
years and years and seemingly still does today if you get lucky enough to
find a salesperson willing/able to.

> And if the carriers are changing their behaviour now, something
> which I have been able to find no evidence of but which I
> accept could be true despite this, this behaviour change
> for the better very likely have been prompted by the very
> lawsuits that people are now complaining about here.


Perhaps- I just think the system is rigged to make no-contract plans too
unattractive for salespeople. In my dealer days, setting up new service
took about 30 minutes per customer- most commissioned salespeople are going
to brush off a "worthless" no contract (no commission!) customer with a "we
don't do that"/"never heard of it" in hopes of either conning you into a
contract, or making you disappear- either of which are preferable to
"wasting time" with a no-commission sale.


> And to tell the truth, if Sprint had a $5/month option
> when I was their customer I would have paid it to get them
> to stop extending my contracts for no particular reason
> every time I had the misfortune of having to talk to their
> customer service. That Sprint lost the recent lawsuit is
> both understandable and just from my point of view.


Agreed. Ironically, when Sprint first launched, they didn't have contracts
at all. Eventually they not only had them, but extended them everytime a
pin dropped!

One of the reasons I always liked T-Mobile was that (up until recently,
anyway) they seemed more flexible and less "policy" driven. A few years ago,
I managed to negotiate a $250 "cash" subsidy in lieu of a phone subsidy
(actually a $250 credit on my bill) in return for a one-year contract
extension, since the phone I wanted from them (my old trusty MDA) was out
of stock for an extended period (the credit was to reimburse me for having
to buy it at full retail from a dealer- a long story I probably covered
here long ago.)

At 07 Aug 2008 15:52:43 -0400 George wrote:

> > No, I negotiate the fees off the table at the start. In reality it
> > makes
> > no difference- they need to make "x" dollars, so the $300 in "fees" I
> > refuse to pay end up in the price of the car somewhere.
>
> But really this is a serious question, why would you even think of such
> a thing as questioning a fee? After all according to this thread
> everything a business requires of us must be fully complied with.

Everything in this thread says we're bound by the contracts we've AGREED to-
not everything a business wants at first. If you don't like the terms of
a contract, don't sign it. I realize a cell company contract is
inflexible, but there are still alternatives like prepaid or no-contract
plans, or even shorte contracts. I've done many one-year cell contracts
over the years, but never a two-year, and I don't ever plan to do a two-year.



> Did you even sleep that night with all of the guilt?

Actually, the best deal I every got on a car was years ago by accident-
tallying up prices of options (on paper), the salesperson make an
arithmetic error, knocking about $1300 off the price. My wife didn't
notice the error and told the salesperson "we'll think about it" and I said
"write it up and I'll sign it now."

Several days later, the sales manager called me, explained about the error
and said we'd bought the car for about $1000 below their cost and asked if
I'd do the "decent thing" and "meet them half way" and pay $500 more.

I told him that sounded fair and I agreed- provided that he called everyone
else who bought the same model car there and "meet THEM half way" and give
them back half of what they paid over cost. When the manager said he
couldn't do that, I told him neither could I, then. And I slept like a baby.


Perhaps Karma from that deal resulted in the utter and absolute screwing I
received on the next car I bought! ;-)


> And your rationalization sounds nice but think about it for a moment.
> If you are negotiating the cost of something and the seller drops a
> fee as a concession where and how exactly did it end up being
> reinserted into the transaction?


It depends where and when it was dropped. My father-in-law used to bluster
in a dealership with crap like "I want your best cash price on a car out
the door- no fees, extras, or add-ons." Sure- there were no "fees" on his
sales documents, but you can be sure they were built in to the sale price
somewhere. I generally just get indignant and threaten to walk. Most
dealers cave, but one has called my bluff and let me walk- I assumed I must
of cut the negotiated price pretty close for them to let me walk over $300.

Justin wrote:
> George wrote on [Thu, 07 Aug 2008 15:56:25 -0400]:
>> Carl wrote:
>>> D wrote:
>> Since you mentioned my name please *explicitly* quote in detail where I
>> even said anything like that.
>>
>> And let me ask you have you ever questioned a fee or negotiated a price
>> at any time. If so why did you do it?
>
> The time to question a fee is BEFORE you agree to it.

What I am surprised at is how compliant people have become to whatever a
megacorp tells them to do. Protest and negotiation are time honored
traditions that should be part of our DNA as US citizens.

If I am dealing with a car dealer, contractor etc I can call them on
something I think might be onerous or unfair and we can negotiate. When
I am dealing with a megacorp and I find something unfair I can't do
that. So there are other means such as collectively shining a light on
the practice to embarrass the megacorp or even proceeding to a civil
action to force negotiation.

I am completely certain that the basis for all of the current protests
against rigid ETFs is not people trying to run away from something but a
formal protest to cause a restructuring of the implementation.

George wrote on [Fri, 08 Aug 2008 09:59:53 -0400]:
> Justin wrote:
>> George wrote on [Thu, 07 Aug 2008 15:56:25 -0400]:
>>> Carl wrote:
>>>> D wrote:
>>> Since you mentioned my name please *explicitly* quote in detail where I
>>> even said anything like that.
>>>
>>> And let me ask you have you ever questioned a fee or negotiated a price
>>> at any time. If so why did you do it?
>>
>> The time to question a fee is BEFORE you agree to it.
>
> What I am surprised at is how compliant people have become to whatever a
> megacorp tells them to do. Protest and negotiation are time honored
> traditions that should be part of our DNA as US citizens.

No megacorp tells me I need a cell phone on a certain contract, that's
the power I have. If I don't agree to the contract I am free to not sign
up. It's not hard.

> If I am dealing with a car dealer, contractor etc I can call them on
> something I think might be onerous or unfair and we can negotiate. When
> I am dealing with a megacorp and I find something unfair I can't do
> that.

Why not?


> I am completely certain that the basis for all of the current protests
> against rigid ETFs is not people trying to run away from something but a
> formal protest to cause a restructuring of the implementation.

Oh bullshit, people signed contracts and now want to weasel out of them
because they didn't read or understand the consequences.

Todd Allcock wrote:
> At 07 Aug 2008 15:52:43 -0400 George wrote:
>
>>> No, I negotiate the fees off the table at the start. In reality it
>>> makes
>>> no difference- they need to make "x" dollars, so the $300 in "fees"
>>> I refuse to pay end up in the price of the car somewhere.
>>
>> But really this is a serious question, why would you even think of
>> such a thing as questioning a fee? After all according to this thread
>> everything a business requires of us must be fully complied with.
>
> Everything in this thread says we're bound by the contracts we've
> AGREED to- not everything a business wants at first. If you don't
> like the terms of
> a contract, don't sign it. I realize a cell company contract is
> inflexible, but there are still alternatives like prepaid or
> no-contract plans, or even shorte contracts. I've done many one-year
> cell contracts over the years, but never a two-year, and I don't ever
> plan to do a two-year.
>
>
>
>> Did you even sleep that night with all of the guilt?
>
> Actually, the best deal I every got on a car was years ago by
> accident- tallying up prices of options (on paper), the salesperson
> make an
> arithmetic error, knocking about $1300 off the price. My wife didn't
> notice the error and told the salesperson "we'll think about it" and
> I said "write it up and I'll sign it now."
>
> Several days later, the sales manager called me, explained about the
> error and said we'd bought the car for about $1000 below their cost
> and asked if I'd do the "decent thing" and "meet them half way" and
> pay $500 more.
>
> I told him that sounded fair and I agreed- provided that he called
> everyone else who bought the same model car there and "meet THEM half
> way" and give them back half of what they paid over cost. When the
> manager said he couldn't do that, I told him neither could I, then.
> And I slept like a baby.
>
>
> Perhaps Karma from that deal resulted in the utter and absolute
> screwing I received on the next car I bought! ;-)
>
>
>> And your rationalization sounds nice but think about it for a moment.
>> If you are negotiating the cost of something and the seller drops a
>> fee as a concession where and how exactly did it end up being
>> reinserted into the transaction?
>
>
> It depends where and when it was dropped. My father-in-law used to
> bluster in a dealership with crap like "I want your best cash price
> on a car out
> the door- no fees, extras, or add-ons." Sure- there were no "fees"
> on his sales documents, but you can be sure they were built in to the
> sale price somewhere. I generally just get indignant and threaten to
> walk. Most dealers cave, but one has called my bluff and let me
> walk- I assumed I must of cut the negotiated price pretty close for
> them to let me walk over $300.
>
Sorry Todd. In this case I agree with your father in law's tactic (though I
don't agree that "blustering" is a good strategy). The ONLY way to
effectively shop for a car, imho, is to get ALL the fees wrapped into one,
comprehensive price. It doesn't matter that you know that there are other
fees hidden in there somewhere. Of course they are. But, when you go to the
next dealership and employ the same strategy, you'll be comparing apples to
apples and not, as so many do, apples to oranges. The number and type of
"fees" a dealer can play with serve no purpose to the consumer but to
confound and confuse them. The only thing that matters is the bottom-line
price, and that's ALL you should be looking at. You will be a better car
shopper if you employ your father in law's strategy and eliminate the
dealer's smokescreen material.

George wrote:
> Carl wrote:
>> D wrote:
>>> On Tue, 05 Aug 2008 17:38:24 -0400, George <george@nospam.invalid>
>>> wrote:
>>>
>>>> Carl wrote:
>>>>> XS11E wrote:
>>>>>> http://tech.yahoo.com/blogs/null/99655
>>>>>>
>>>>> This is an example of cry-baby consumers shooting themselves in
>>>>> the foot. While I'm not a fan of Big Business, I understand that
>>>>> early termination fees are necessary in order to allow carriers
>>>>> to give away the phones at highly discounted prices. They intend
>>>>> to make the money back over the life of the contract. That should
>>>>> seem obvious. It is, after all, the goal of business to make a
>>>>> profit.
>>>> Sure, but they don't have to kick you in the face doing it. I
>>>> accept the subsidy part but the phone companies were being awfully
>>>> heavy handed the way they enforced the early termination fees and
>>>> that is what rightfully got people mad. If the fee was say $175
>>>> and you canceled the day before your contract expired they dinged
>>>> you for the full $175. If you canceled a day later you paid
>>>> nothing. I would love to hear an explanation how that was fair and
>>>> reasonable.
>>> If you had contracted to have someone build you a house, would you
>>> be upset if he got everything done "except that last window put in?"
>>> surely you would expect him to finish what he agreed to, right? so
>>> why should a cell phone company be any differantly? you agreed to
>>> keep service to a certain point, or pay the etf. why is it so
>>> "unfair" to expect you to do as you say?
>>>
>>> To answer your question with another question, how is it not fair
>>> and reasonable to expect someone to do as they agreed to? Not
>>> almost do what they agreed to, but actually stick to the agreement?
>>>
>> Exactly what I was going to say (well, maybe not 'exactly', but
>> pretty damn close). I don't get posters like George who expect to be
>> protected by Big Brother from every mistake they can conceivably
>> make and feel they have no obligation to the terms of the contract
>> they entered into. When you sign a contract, George, read and
>> understand the terms of it. And live with it. If you feel you're not
>> competent enough, don't enter into them. But let's stop whining
>> about everything, shall we?
> Since you mentioned my name please *explicitly* quote in detail where
> I even said anything like that.
>
> And let me ask you have you ever questioned a fee or negotiated a
> price at any time. If so why did you do it?
>
I can't George. You didn't literally say, "I expect to be protected by Big
Brother from every mistake I can conceivably make.". Rather, mine is a
summary statement of what I've inferred from your postings. I think others
agree, more or less. Like any generalization, it is arguable, I'll grant you
that.

Of course I've questioned a fee and negotiated a price. But I do that BEFORE
I enter into the contract. I don't take what I can get for myself and then
complain about the terms I don't like AFTER the contract has been signed.
And that, if I'm not mistaken, is what this thread started about. Early
termination fees have been a staple of the cell-phone industry for more than
two decades. It is what allows the providers to give us "free" or
"discounted" phones. I am a fan of the early termination fee system and
understand its purpose. I am angered that someone, or some group, took the
cell company to court and even more incensed that they actually WON! I am
confident that this hollow "victory" will eventually result to us in a more
complex, and more costly system. For example, look how well the divestiture
of the telephone company did for us, based on some idiotic lawsuit of 30+
years ago. I have NO chance at understanding my phone bill now, nor can I
possibly calculate which system is best for me without consulting an
engineer, and I have been slammed at least once until I got wise to that
tactic. I can't possibly store all the different phone books I get, nor can
I tell which are the "real" ones vs. the "others" since the walking fingers
logo was not protected. I don't see where I've saved any money either. Do
you? Now watch your "new every two" opportunity go out the window.

On Jul 31, 4:25*pm, XS11E <xs...@mailinator.com> wrote:
> http://tech.yahoo.com/blogs/null/99655
>
> --
> XS11E, Killing all posts from Google Groups
> The Usenet Improvement Project:http://improve-usenet.org

Oh right I forgot the carriers never tell anyone about the fees.

M. Graham

At 08 Aug 2008 14:55:20 -0400 Carl wrote:

> Sorry Todd. In this case I agree with your father in law's tactic (though
I
> don't agree that "blustering" is a good strategy). The ONLY way to
> effectively shop for a car, imho, is to get ALL the fees wrapped into
one,
> comprehensive price. It doesn't matter that you know that there are other
> fees hidden in there somewhere. Of course they are. But, when you go to
the
> next dealership and employ the same strategy, you'll be comparing apples
to
> apples and not, as so many do, apples to oranges. The number and type of
> "fees" a dealer can play with serve no purpose to the consumer but to
> confound and confuse them. The only thing that matters is the bottom-line
> price, and that's ALL you should be looking at. You will be a better car
> shopper if you employ your father in law's strategy and eliminate the
> dealer's smokescreen material.


I agree with you- however, in my experience, the fees typically reappear
when it's time to sign, due to the ridiculous "departments" you are
shuffled between at many dealerships. I negotiate a firm price with the
salesperson, get a verbal assurance that this is the "final" price, then
when the sales contract appears in the finance manager's office (who
you're forced to see whether you want financing or not!), the
"documentation fees", "dealer prep", etc. all are there, with dumbfounded
managers acting surprised that I would try to stiff them out of these
perfectly legitimate and necessary fees. That's when I get mad and
threaten to walk, because I truly hate the charade of car buying.

The last dealership I bought from, earlier this year, actually has the
audacity to add a "dealer sticker" to EVERY car on the lot adding $1300
worth of "undercoating" and $500 of "theft-deterring micro-dots" to every
car, apparently hoping that when they allow you to negotiate down the added
$1800 to MSRP, you think you've gotten a deal! (They also have a $350
documentation fee!)