AT&T To Drop Early Termination Fees - InformationWeek
04:41 PM

AT&T To Drop Early Termination Fees

The policy change follows on the heels of a lawsuit filed by customers against T-Mobile.

AT&T on Tuesday announced new policies that apply to customers changing calling plans or exiting contracts early.

Starting next month, customers who change a wireless calling plan will no longer be required to extend their current contract with AT&T or sign a new contract.

Customers who terminate a contract early will no longer have to pay a flat early termination fee. The fee will be lowered during the term of the contract. The early termination policy, however, will go into effect early next year and will apply to new and renewing customers who sign a one or a two-year contract.

Customers that choose not to sign a contract can choose the pay-as-you-go option, which AT&T offers with its GoPhone.

"Customers have told us they do not like one-size-fits-all approaches. They are right, and that is why we have made these important changes," said Paul Roth, president of sales and marketing for the carrier's wireless unit, in a statement.

AT&T's policy change follows on the heels of a lawsuit filed by customers against T-Mobile, seeking an injunction that would prevent the carrier from collecting an early termination fee of about $200 from customers. Last week, the California Supreme Court gave a go-ahead for the lawsuit, despite T-Mobile's efforts to dismiss the case. T-Mobile is now facing a class-action lawsuit. Carriers argue they cannot eliminate early termination fees altogether because they wouldn't make a profit, since they already offer subsidized mobile phones to customers. But customers feel that a flat rate that carriers charge is unfair.

One InformationWeek reader wrote in response to an article on the T-Mobile lawsuit: "Two-hundred dollars over 2 years is about $8.33 per month. If the carrier is subsidizing my phone, then they have the right to get back that cost. Charge me $9 per month for each month left on my contract when I cancel. $200 for canceling 1 day before is robbery."

AT&T's new policy to charge a fee based on the term of a contract is not an ideal solution, but it's a start. Other carriers are likely to follow in its footsteps in fear of lawsuits.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
2017 State of IT Report
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Register for InformationWeek Newsletters
White Papers
Current Issue
Top IT Trends for 2018
As we enter a new year of technology planning, find out about the hot technologies organizations are using to advance their businesses and where the experts say IT is heading.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll