Understanding AT&T Wireless Early Termination Fees

If you have a service contract with AT&T Wireless, and you are trying to cancel, you might find yourself battling the headache that is the early termination fee.

Many people have questions about the legality of an early termination fee and under which circumstances it applies. We explain. 

What is an early termination fee?

An early termination fee is usually associated with contractual services so when it was commonplace for telecommunications companies to require a minimum two-year contract for just about everything, the early termination fee was applied to anyone who broke that agreement prematurely. Today it follows the same concept.

What is AT&T’s early termination fee?

If you sign an agreement with AT&T for 1-year or 2-year contracts, you have 14 days after you purchase to cancel your service. If you cancel within the first 14 days you are not charged an early termination fee.

If, however, you cancel anytime thereafter, you may get charged one of two types of early termination fees:

1. The first is $325 which is prorated at $10 for every full month that you are committed to your contract. This is for any contract that involves a smartphone. So, if you have a 2-year contract and you want to cancel after one year, $120 or $10 times the 12 months you remained with the company, gets subtracted from that total fine of $325. This applies to a two-year or one-year contract.
2. The second is $150 which is prorated at $4 per month for every full month you use their service.  This is for any contract that involves a basic phone, a mobile hotspot, a tablet, AT&T wireless internet packages, or any other connected device. This means if you have a one-year contract and you quit after 5 months, $20 is subtracted from that $150 total. This applies to a two year or one-year contract.

Note: AT&T will still charge you a restocking fee for any device that you returned within that 14 day grace period of $55.

How do I know if my contract with AT&T has an early termination fee?

Review the AT&T cable and internet consumer service agreement which sets out all terms and conditions for the services you have including early termination fees.

Can I try and negotiate my AT&T early termination fee?

You can always try. The best time to negotiate against an early termination fee before you take out a new contract. This is something you can do if you are looking to capitalize on a new service, if you moved to a new area, or if AT&T is offering a promotion or discounted deal that you want to add to your service package.

Of course, this isn’t always possible. Sometimes you already have a contract but you need to cancel early. In this case, send your cancellation in writing and confirm delivery. Speak to customer service if you can and get anything they promise in writing. Just because a customer service representative agrees to reduce or waive your early termination fee does not mean it will happen. You need to get this in writing and have a copy of it ready in case you have to fight AT&T later. 

How can I avoid or minimize an early termination fee from AT&T?

There are a couple of ways that you can avoid or minimize your early termination fee. The easiest way is if AT&T has broken their end of your agreement as well. If you can prove that AT&T promised to provide a certain service with a certain service, speed, etc, then you may not be liable for cancellation fees depending on your specific contract. Similarly, if you start a new service or take out a new contract, there is a grace period during which time you can cancel without an early termination fee.

Your other options are to show that a salesperson gave you misleading information about your contract. You have to be able to prove that they said something to you, preferably in writing, that had misleading information about something like the length of your contract, the cancellation terms, the pricing, and so forth.

I’m being charged an early termination fee by AT&T but I shouldn’t be, what can I do?

At FairShake, we can help. Learn how our process works in your favor — or start now…