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Cancel Your Cell Phone Contract Without Paying Fees


The early termination fees that cell phone companies charge are outrageous! Most companies charge anywhere from $150-200 if you cancel your contract before you fulfill the terms. I just signed up for the Sprint SERO offer even though I hadn’t fulfilled my other phone contract with Verizon. I don’t want to pay the $175 early termination fee, so thankfully, there are several ways to get out of a cell phone without paying a penny.

1. The cell provider changes the terms of the contract

If your cell carrier changes the terms of the contract you signed, you can cancel your contract without paying any early termination fees. Many states require cell phone companies to give customers advance notice of contract changes which could increase the cost or extend the length of the contract. These cell phone companies must get consent from their customers before increasing the cost or extending the length of contract. This is only fair; why should you have to uphold the new terms of a contract you did not originally agree to?

On Jan 1, 2008, Sprint changed their terms of service and you can cancel your Sprint contract without any fees. Note: Cell providers are required to notify you of these changes to their contract terms, but they are often buried in small print within your bill.

2. Transfer your contract to someone else

There are 2 ways you can do this. The first is if you transfer your cell phone contract to someone you know. I called Verizon the other day to determine how to do this. The process is free, easy to accomplish, and can be done over the phone in 20 minutes if both people are there together.

Here is what to do: Ask to do an Assumption of Liability; this legally transfers the remaining terms on the contract to another person. The cell provider’s customer service representative (CSR) will send a copy of the contract terms and the other person has to read over these and verify they have read them. From there the CSR asks the person assuming the contract a few questions, verifies their SSN and some other information, and completes the deal. The minutes and bill are prorated between the two individuals. Keep in mind your bill has to be current and the other person must be at least 18 years of age or older. A credit check for the person assuming the contract will also be done.

The second way to transfer your service is to use a third party to find someone willing to assume the contract for you. This is essentially the same process as above, but you are using someone else to help you find a match. Trade My Cellular provides this service free of charge. Cell Swapper and Cell Trade USA charge $20 to the person giving up their contract. In all cases, it is free for the person assuming the contract. These services can also be a great place to find a deal on a contract because many people are willing to give their phone and accessories as well as pay for the first month’s service to whoever takes over the contract. However, at $20 + paying for a month of service (which many people do), it can run $60 or more to transfer your contract. This is still much cheaper than paying the early termination fee of $150-200!

3. Complain often, but do it the right way

What do you do if you have spotty service, dropped calls, or your calls repeatedly go straight to voice mail? Complain to the company – but do it the right way. When you call the customer service representatives be polite and professional, thoroughly explain the situation to them, and be patient. If this is the first time this has happened you could ask for a discount to recompense you for your troubles. If this is a recurring problem, you should ask to get out of your contract. This works best if you call often and keep records.

The first level of customer service reps don’t always have the authority to do too much, so you may have to elevate your complaint. Again, being polite is the best way to deal with this. If you don’t get anywhere, you may have to lodge a complaint with the Better Business Bureau or the Federal Trade Commission. Sometimes just mentioning the BBB or FTC may be enough to get you what you want – out of your contract.

4. Sweet talk your way out

This is probably the most difficult way to get your contract canceled without paying the early termination fees. Cell phone companies don’t like to lose customers, so they will do everything they can to keep your contract with them. You may not be able to get out of your contract, but calling and asking to cancel may be a good way to convince your cell provider to lower your bill a few dollars. Again, this is difficult to do.

5. Overuse free roaming

Most cell providers offer free roaming nowadays. The service isn’t really free for them, but they often cover the charges for the customer. It is easier for them not to deal with the customer complaints and the flood of calls to the CSRs. The cell providers don’t like it though, when the majority of the minutes you use each month are roaming minutes because it means less profits for them. Generally you need to place at least 51% of your calls from outside your carrier’s area. Read more about how to do this at Roaming Hack.

6. Move out of the cell provider’s area (go off the grid)

Cell providers have limited coverage. There will always be some location where they do not have service. You can always move to one of those locations, or if you are in the military, you can usually cancel your service if you deploy for a long period (sometimes they just place your contract on vacation mode). Some people have also had luck calling in the CSR and telling them they have moved to some small desert town without coverage (whether or not they actually moved there). In this case, do what your conscious allows you to do.

What next?

The good news is that many cell providers are offering, or plan to offer, prorated early termination fees. Unfortunately, my current provider, Verizon didn’t offer this feature until several months after I signed my contract. They only prorate the termination fee by $5 per month, so it would save me money, but it would still be cheaper to use a third party service to transfer my plan to someone else.

What do I plan on doing? I have a friend who is looking for a Verizon contract so he can use mobile to mobile minutes to talk to his girlfriend without using up all his minutes (they have different providers). If he wants it, I will transfer it to him at no cost. If he doesn’t want it, I will use Cell Swapper or Cell Trade USA to transfer my phone to someone who wants it. I will also gladly ship him or her my Motorola Razr along with my contract. It’s much cheaper than spending $175!!!

Update: I was able to transfer my cell phone contract at no cost. My friend was happy for the new phone, and I was happy to transfer my contract – it was a win-win situation!

Here are some more was you can cancel a cell phone contract without paying fees. Alright, I’m off to go play with my new phone. ;)

Check out these great cell phone deals! T-Mobile is currently offering some great deals on their individual and family cell phone plans, and here are special AT&T Wireless offers. Want to avoid contracts? TracFone offers great pay as you go plans.

Published or updated September 8, 2010.
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