Carrier is under heat over increased smart phone fees, surprise mobile internet fees
DailyTech recently reported that Verizon Wireless was raising
its early-termination-fee on advanced devices (smartphones) from
the previous fines of $175. The move was largely in response to
resales of the BlackBerry
Storm 2 and Blackberry Tour purchased under the Buy-One-Get-One
(BOGO) promotion. Customers buying one of the phones got
another for free -- and that phone was worth more than current $175
ETF. Customers were getting the second BlackBerry, canceling
its plan, selling the phone, and pocketing a $100 or more
difference.
The ETF bump, though, was unfortunate for the
average consumer who saw the price of cancellation at the one-year
market jump from $175 or less to $230. The decision led to an
U.S. Federal Communications Commission inquiry into why Verizon was
sticking it to its customers.
Verizon has at
last responded and comments, "The higher (early termination
fee) associated with Advanced Devices reflects the higher costs
associated with offering those devices to consumers at attractive
prices, the costs and risks of investing in the broadband network to
support these devices, and other costs and risks."
Observers
note that Verizon's ETFs are the highest in the industry, with
typical fees from Sprint, AT&T, and T-Mobile starting at between
$175 to $200 and being pro-rated over the course of the contract.
According to a recent Government Accountability Office report, ETFs
were among the top four complaints submitted to the FCC between 2004
and 2008.
Carriers justify the fees pointing to the fact that
they offer discounted phones to consumers when the consumer purchase
a plan. Aside from recouping those costs, Verizon says its
hearty termination fee helps cover the company's advertising expenses
-- perhaps helping fund its latest
attack commercials against AT&T.
The FCC is also
investigating another complaint against Verizon. Customers have
complained that they were charged a $1.99 fee for inadvertently
accessing Verizon's Mobile Web service. Verizon claims that the
service, included on most of its phones, does not fine users for
"simply launch[ing] the internet browser and land[ing] on the
Verizon Wireless Mobile Web homepage." It says customers
that feel they have been unjustly charged can contact customer
support and ask for a refund.
"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
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