Early Termination Fee

raj75

Does anyone what is the concept of "Early Termination Fee"?.

When I contacted "3" for cancelling my contract (due to end on Aug 12), they gave 2 options.

1) 1 Month notice, so that contract ends at Aug 12th.
2) Immediate end to the contract and I should pay rest of the contract money + a "Early Termination Fee" which would be a additional £10.

mike_wall15

I personally think it's pointless terminating early....

Say you have a 12 month contract and you're on month 6... you could just stop using your phone and pay the bills when they come in every month until month 12 when you cancel...

...or the other option is to pay everything at month 6. So this would be 6 x Line Rental and a cancelation fee (not sure if all companies have this).

My favourite option would be to downgrade the contract to the lowest amount. Keep the sim in the corner of the house and just pay the basic line rental until you are at month 11 when you can give the 1 months notice.

raj75

mike_wall15 wrote:

I personally think it's pointless terminating early....

Say you have a 12 month contract and you're on month 6... you could just stop using your phone and pay the bills when they come in every month until month 12 when you cancel...

...or the other option is to pay everything at month 6. So this would be 6 x Line Rental and a cancelation fee (not sure if all companies have this).

My favourite option would be to downgrade the contract to the lowest amount. Keep the sim in the corner of the house and just pay the basic line rental until you are at month 11 when you can give the 1 months notice.

You are right. My plan, is get a new contract after 6 months. Because a new contract, is sometimes better than continuing the existing contract after 6th month. I will get double minutes offer and a new handset also.

But to transfer my number across I will need to cancel my existing contract.

jf2404

An early termination fee is just another pointless fee basically, they will say they need it to stop your contract and for "admin fee's", they don't charge the fee when your contract is over do they ?, nope, just because you are still in contract and they are unhappy you signed for 12 months but you want to break that, so they slap a charge ontop.

You are quite in your rights to end it early, but they try and get as much as they can out of you.

When i worked for Vodafone we didn't charge any fee like this, we just charged the line rental for the remaining contract and thats it, eg, 6 months left, 6 X line rental = total to pay and thats it.

darrenithell

I've always cancelled my contracts after six months and taken out a new one, it can work out much cheaper.

1. After 180 days call your network and reduce your tariff to the lowest line rental, usually about £15 per month.
2. Ask them to issue a PAC code so you can port your number with a view to closing your account and sending a final bill after your number has been transferred.
3. Order your new phone. If you're buying a phone on 3 or on Orange then you can order right away and port your number after you've received your new handset. If you're buying on O2 or Vodafone then you'll have to wait for your PAC code to arrive before you can order.
4. Sell your old phone on eBay and use the money to pay off your existing line rental.
5. You have a brand new phone with a new contract and any short term incentives included in the deal (e.g. 3 months half price or double mins for six months)

A couple of problems that could arise.

If you had previously chosen a deal with cash back and the cash back was due after month six (that's most of them - aparrt from Phones 4U) then you won't have a bill to send off with your claim voucher. I don't know how the dealer would handle this but there's a good chance they won't pay up. The best solution is to choose a deal with no cash back and get a better phone, it's less hassle and in most cases you'll get the money back when you come to sell the handset six months later.

Alternatively, if you're already on a cash back deal you can keep paying the reduced line rental of £15 per month for the last six months. This could present one or two other problems; you won't be able to port your number and if the dealer is picky they may be hesitant on paying cash back if you've changed the tariff (even though it has no effect on them). Best to check your cash back terms and conditions.

I wonder if the networks would ever introduce 6 month contracts? Using this method, effectively you are buying 6 month contracts at a premium of £90 per handset.