Cell Phone Discontinuation Fee Laws

Laws covering cell phone contracts are limited.

Under current law, the only way you can avoid paying a discontinuation charge, or early termination fee, on a cell phone contract is if the company changes the terms of the agreement. In this case, you may discontinue your service without penalty. Some courts have ruled that costly termination fees are unfair to consumers prompting the Federal Communications Commission to issue recommendations to the cell phone industry concerning the practice.

Fee Structure

Early termination fee amounts should be related to the value of the cell phone. Lower-priced phones should not carry a cancellation charge identical to models that are more expensive. In addition, these fees should be prorated throughout the contract period.

Length of Contract

Cell phone service agreements should be for a reasonable length of time. If the customer renews a contract without obtaining a new phone, early termination fees should not be extended.

Delayed Fees

A customer should be allowed to use the phone for a period to ensure its reliability and have a right to check their first bill for consistency. During this time, fees for canceling the agreement should not be enforced.

References

• Cash Money Life: Cancel Your Cell Phone Contract Without Paying Fees (First paragraph & #1. The cell provider changes the terms of the contract)
• Lead Counsel Corner: No More Cell Phone Termination Fees?

Resources

• Switched: Tips for Avoiding Early Termination Fees