Understanding Tracfone Early Termination Fees

Is Tracfone charging you a bogus Early Termination Fee? FairShake can help.

"What you should know about early termination fees"

If you are trying to switch phone carriers or you are simply looking at your existing bill and a little confused by something called the early termination fee, you are not alone. Many people don’t know what it is or whether they have it associated with their account.

Why do phone companies charge early termination fees?

An early termination fee is what a company charges when you back out of a contract prematurely. It can be easy to forget that signing up for a telecommunications service is a legally binding, contractual agreement. That is why there are terms and conditions. The company agrees to provide you with the services and you agree to pay for them for the given length of time. 

If you cancel that contract early, then the company will charge you to recuperate their losses. However, companies like TracFone don’t have early termination fees that way big providers do, because TracFone is a prepaid plan, not a contract. 

Is an early termination fee legal?

Yes, in almost all cases, so long as a company is clear and up front about it, and you could find it listed in your contract or the terms and conditions. 

When do I pay them?

The terms and conditions for any provider will lay out under what conditions the wireless provider can cancel your contract as well as under what conditions you can cancel the contract. You are under no obligation to remain with a provider in almost all cases which means you can exercise your right to cancel your contract prematurely but then you get faced with an early termination fee. 

Early termination fees get paid usually automatically, meaning telecommunications companies will charge whatever method of payment they have on file as soon as you cancel your contract. They might also charge you if they choose to cancel your contract.

Can I avoid or reduce my early termination fees?

You can typically avoid early termination fees by using prepaid companies like TracFone and paying for the phone you use up front. Be advised that even if you do sign a contract, carriers are required to give you a full refund within 14 days if you choose to cancel for any reason. You also have to return any equipment you received in new condition in order to avoid additional fees.

When it comes to reducing your early termination fees, this is easier done by reaching out to customer service. When you decide to close your account, if there is a serious reason behind it such as a natural disaster that destroyed your home, or job loss that has reduced your income, you might be able to get the fee waived if you can prove this. 

What is the TracFone early termination fee?

This differs based on where you live and what plan you take. The prepaid plans do not have an early termination fee, but TracFone has a monthly plan in some states where there is an early termination fee. In Illinois, for example, the fee is $50 or 10% of the price of the contract, whichever is greater. If you get device financing, meaning you have a third-party through which you get a cell phone that you will pay over the course of a multi-month contract, you might have additional fees for cancellation of that contract.

Why would some TracFone contracts include an early termination fee?

Companies include early termination fees as a way to protect themselves against financial loss. While you would no doubt do this, some more nefarious customers might capitalize on an equipment deal or an introductory offer with the company, taking advantage of cheap equipment or 1 month of free service and then canceling with no intention of following through.

How do I know if my contract with TracFone has an early termination fee?

Read your contract and the terms and conditions. If you signed up for a third party to help you pay for a device through long-term contracts, look for their respective terms and conditions as well.

Can TracFone charge an early termination when I don’t owe it?

Again, knowing the terms and conditions of your contract is imperative. If you don’t review it, then you might sign an agreement without realizing that there is an early termination option. Alternatively you might agree to close your account only to see the fee the next month when you weren’t expecting it because a customer service representative misled you. 

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

Learn your rights under consumer arbitration. And tell us your complaint today…

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