Is Net10 charging you a bogus Early Termination Fee? FairShake can help.
An early termination fee is a standard fee for any contractual service especially among telecommunications providers. The idea behind this fee is that customers sign up with a company for a specific length of time and they enter into a legally binding contract. This contract stipulates that the customer will pay a certain amount, what they pay each month, in exchange for certain services, and this good-faith agreement means that the customer says they will stick around for the duration of the contract.
These contracts were usually one or two years in length. So the companies can budget accordingly based on the income they will get during those months. But when a customer leaves early, the company is able to recuperate some of their lost profit by charging an early termination fee.
However, excessive early termination fees resulted in a lot of companies like Net10 offering contract-free agreements for wireless services so that customers didn’t have to deal with the same legal constraints.
Consider this: When you sign up with a new wireless carrier, they give you a promotional deal where you only pay $50 for a new smartphone. You sign up for a 2-year contract paying $40 per month. The actual smartphone is $500 but the wireless carrier is paying the difference of $450 under the auspices that you will reimburse them for that money over the course of your 2 year contract. If you break that contract, they charge you an early termination fee to recuperate those losses.
Yes, they are legal in almost all cases so long as you sign an agreement that contains the information about them.
There are few ways that you can avoid early termination fees or reduce them.
All carriers have to give you a full refund within 14 days if you cancel and return any associated equipment in that time frame. This is an easy way for you to avoid the early termination fee if you realize early enough that you will have to cancel your service or if the service isn’t everything you thought it would be.
If you switch providers you can take advantage of promotional deals offered by major carriers called the contract buyout. The contract buyout is where a carrier will help you switch service by paying for your remaining contract and any closing costs like the early termination fee. They typically have a financial limit which means if you have more than one line you are trying to cancel and all of those lines have their individual early termination fees, it might not cover it. What’s more, they don’t actually pay directly for the cost. Instead you have to pay the early termination fees, and they will reimburse you with a prepaid debit card.
A much easier way to avoid early termination fees is to switch services to a no-contract provider and to pay for your phone outright. If you pay in full for a phone then you don’t need third-party leasing or financing which means you have no contract for the devices you buy. If these devices are paid for in full and unlocked you can use them with whichever provider you want.
If you happen to have a contract either for a service or device, and you can prove that a salesperson misled you with regard to the terms of that contract, then you can fight the early termination fee.
There are no early termination fees associated with the prepaid plans that have no contract.
However, look over every line of your contract and the terms and conditions from Net 10.
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