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AT&T to prorate early-exit fees for new users

updated 12:05 pm EDT, Mon March 31, 2008

ATT Prorates Cancel Fees

AT&T today handed an olive branch to new subscribers with a plan to ease restrictions on new customers. From May 25th, the company says it will no longer insist that these subscribers pay the full Early Termination Fee (ETF) if they back out of a one- or two-year contract. Instead, the company will prorate the fee based on the customer's existing stay. The fee will drop by $5 for every month the customer remains an active subscriber and potentially drops as much as $115 off of the cost of exiting a two-year plan ahead of schedule.

The news acts on promises made late last year and is believed to in part be a reaction to a similar move by Verizon, which also vowed to prorate its ETF as an incentive to customers worried about committing to a contract.

AT&T nonetheless preemptively shut down calls to eliminate the ETF altogether and explained that customers could buy a phone at full price either from AT&T or as an unlocked phone to avoid the fees; prepaid phones without any monthly plans are also options, according to the company.

By Electronista Staff
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  1. climacs

    Mac Enthusiast

    Joined: Sep 2001


    that's fair

    the ETF is not there to s**** customers, despite what bellyachers want to think; if you bought a subsidized phone, that free or nearly-free phone's price was predicated upon the carrier making up for that subsidy by having you as a guaranteed customer.

    Pro-rating the hated ETF is a more equitable way for the carrier to get their money back for their subsidized phone; it makes no sense to charge the full ETF if the customer wants to leave a month or two prior to the contract termination.

    Now, if only carriers would get rid of this nonsense of resetting your contract length simply because you want to change your calling plan. It is onerous, predatory policies like this which turn people like me off to ever signing any contract with a carrier.

  1. jhawk95

    Fresh-Faced Recruit

    Joined: Oct 2006


    But WE didn't blanche!

    But we didn't Blanch, we didn't buy "Subsidized" iPhones from AT&T... and yet we still have an early termination fee.

    AT&T shouls throw out the fee to anyone who bought an iPhone!

  1. testudo

    Forum Regular

    Joined: Aug 2001


    Re: but we didn't

    It's been said many a time. The iPhone is subsidized (through payments you make monthly, which then get sent to Mr. Jobs and company).

    The only difference is that (a) the phone costs an arm and a leg to begin with (making people think they aren't subsidized), and (b) they don't offer it unchained to AT&T.

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