The FTC has issued a letter to Verizon giving them until December 17th to explain why their early termination fees (ETF fees) have been doubled.
Effective November 15th, the ETF fee went from $175 to $350 (ouch!).
Sounds brutal? I think so, too.
Then again, consider this:
- A Blackberry Storm 2 also retails for about $700 without a contract.
- A Palm Pre goes for about $749 without a contract.
You get the idea.
Let's do the math.
You can buy either of those phones for $99 - $199 (depending on the phone) with a two year contract.
If I purchase a smartphone for $200 with a two year contract (to get the low price), and then turnaround and just terminate the account for $175; I have spent a total of $375 to walk away with a new smartphone. That's a lot cheaper than the $700 price tag off the shelf without a contract.
What's to stop bootleggers from pulling this little stunt en masse?
I'm guessing this point will be made in that letter to the FTC.
I can't believe I'm defending a phone carrier's fees.
Of course, it does underscore how ridiculous those retail price tags are to begin with now doesn't it?