Avoid Early Termination Fees in Cell Phone Contracts

Wireless carriers want to keep you...forever. That's why most of the biggest carriers--Verizon, AT&T, and Sprint--require a contract. If you're ever unhappy with the service and want to leave before the contract has expired, you'll be charged a hefty early termination fee (ETF). That, they say, is used to subsidize the lower cost of the cell phone you're buying. If you want to switch and don't want to pay a termination fee, however, there are a few ways to go about this.

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Swap Your Contract with Someone Else

CellSwapper. Screenshot by Melanie Pinola

You want to get out of your contract. Someone using a different wireless service wants to ditch his/her provider. It's a win-win-win situation (for you and that person, and the wireless provider still gets the monthly payments). You can swap your contract for someone else's at one of a number of sites, including Cellswapper, TradeMyCellular, and CellTrade.

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Report Violated Terms of Service

Terms of Service Agreement. Rosenfeld Media

Cell phone providers' complicated and ever-changing terms of service can be useful in a situation like this. As your contract likely states, if the company fails or violates any of the terms of the contract, you could be entitled to leave--without paying the early termination fee. For example, when Verizon Wireless made a change from $0.13 to $0.16 for the "regulatory fee," this was a "materially adverse change of contract," which voids the current contract if you don't agree to it, The Consumerist reports. You'll need to keep an eye on these (even small) changes in your contract to be able to take advantage of this.

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Complain About Bad Service

Likewise, if you call customer service saying you can't get decent coverage in your area, you might be able to get out of the ETF. After all, the wireless provider isn't keeping their end of the contract. This doesn't always work, as the carrier could just refer to their coverage maps as proof or send someone to test in your area (and by Murphy's Law, it'll work for them).

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Have Your New Wireless Provider Pay the ETF

You're a VIP to wireless providers, who want to steal as many subscribers from other carriers as possible. That means you'll often find incentive offers for you to switch that include paying for the early termination fee. T-Mobile and AT&T, have been known to offer up cash for users switching to them.

One of the least expensive cell phone providers, Ting, may reimburse your early termination fees up to $75 per device (or 25% off of your early termination fee). It's not 100% and won't cover the entire ETF, but still worth something.

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Make the ETF Less Painful

If none of the above work, try one of these tips, to at least take the bite out of that expensive breakup fee:

Sell your phone for as much as you can on Craigslist or elsewhere (See: Where to Sell Your Old Laptop or Smartphone for the Most Money.
Don't forget to Wipe Your Old Phone Before You Sell It, though.) You might also be able to sell your contract on Craigslist.
Lower the cost of your cell phone service by trimming as much off the plan as possible (How Much Data Do You Really Need anyway?)