Early Termination Fees are probably one of the more annoying aspects of a carrier agreement. They are a necessary evil that we have all had to live with if we chose to do a contract agreement for a discount on a device purchase. The simple truth is carriers don’t make squat on a customer’s account until the contract is nearly over. Hence the need to recoup those costs if said customer decides to quit paying the bill or cancel service. It is also a reason why some carrier service plans run a little higher than others and also why some have started offer device installment plans instead of, or along side, contract accounts.
Verizon has had a fairly large ETF pay-off, $350 per-line. As time went on during your contract you were granted $10 off this termination fee per-month. This decrease started the very first month of your contract. Mathematically speaking, over the course of your 24 months you would knock that ETF down to $120 on the 23rd month with it getting wiped out entirely on your final month. The new policy on the other hand, is going to be shifting that depreciation. Now, the full $350 will remain in effect for the first 8 months. After that it will slowly dwindle by $10 a month for 11 months. On the 19th month, that will increase to $20 a month for the next 4 months. In the end, the 23rd month of your 24 month contract will still carry a $140 ETF charge vs the previous $120.
I am not all that surprised at the move myself. If you consider the price tags of some of the flagship devices that we have been seeing when it comes to their off-contract pricing I am certain Verizon has seen a few take advantage of cost difference. Take for instance the off-contract price tag of the Samsung Galaxy Note 4, $699.99. With a contract you can get it for $299.99. If you cancelled immediately and paid off the contract fee, you technically get the Note 4 for $50 less. If you wait out the contract a couple of months, then you are technically saving even more. Obviously if you cancel and don’t pay your ETF then you are hosed as the device will soon find its self on a blacklist and become unusable. By shifting this $10 discount out by 8 months it ensures Verizon ends up staying in the green versus the red on devices and accounts.
What are your thoughts on the shift to the ETF policy?
Source: Droid-Life
