Consumers express growing frustration with early termination fees

Photo (c) Birgit R EyeEm - Getty Images

The Biden administration is already looking to address the issue

If you’ve ever been to the point of pulling your hair out over a bad experience with a service only to find that there’s a hefty early termination fee involved with cutting ties, you’re not alone. As a matter of fact, ConsumerAffairs reviews are rife with horror stories about early termination fees.

Companies that charge early termination fees run the gamut, but internet and satellite TV providers seem to use them frequently.

The White House was evidently seeing the same thing that we were at ConsumerAffairs. In an executive order President Biden signed last week, the White House outlined steps that it’s taking to tackle early termination fees. The Biden administration acknowledged the reality that many consumers face when it comes to these charges. 

“If a consumer does find a better internet service deal, they may be unable to actually switch because of high early termination fees -- on average nearly $200 -- charged by internet providers,” White House officials stated in a fact sheet

Consumers struggle with early termination fees

Cutting out early termination fees will not only take some incidental revenue out of the pockets of vendors who demand that consumers pay one, but it will also make life easier for consumers who would like to make choices without feeling like they’re being taken hostage. 

Take ConsumerAffairs reviewer Leticia of Texas, who was one of the many reviewers who had a sour experience with DISH Network. She urged other consumers to not get into any long contracts with Dish, even if they’re offered special prices.

“They will promise you to go to your house to install on a certain date then they don’t show up and you still have to abide by the contract,” she wrote in her review.

While the COVID-19 pandemic forced many people to depend on internet service to work from home or allow their children to attend school virtually, it also impacted people financially. One of those people -- Sarah of California -- was a Cox Internet subscriber and thought the company would be understanding of her situation. However, she said the company wouldn’t move off its early termination fee policy.

“I was told when I initially changed my plan due to my low income and illness during COVID-19 that I would not be charged these fees due to the fact my high school student and 2 college students needed COX’s online services, as I am low income and qualify for their low income plan for my students and myself,” Sarah wrote in her ConsumerAffairs review. 

“COX advertised $19 internet for low income families with students in San Marcos and refused to give me that plan. My bill is over $1000 in fees that they refuse to credit me. [Cox’] Retention Supervisor said they can’t credit over $200 and can only submit a request for any further fees, therefore I am responsible for all remaining fees.” 

How to handle early termination fees

To see what options consumers have when it comes to addressing early termination fees, ConsumerAffairs reached out to Ben Kurland, one of the co-founders of BillFixers -- a company that negotiates on behalf of consumers like Leticia and Sarah who feel stung by early termination fees. He said many people don’t realize that there are ways to get these charges waived.

“There are a handful of options available to consumers and most people are surprised to learn that it is actually possible to waive them or negotiate them down. And what we do isn’t some sort of secret sauce — consumers can absolutely contact their providers and try to get out of them. It’s not a sure thing, but worth a shot versus paying hundreds of dollars,” he said.

Your best bet? Kurland said consumers should contact their provider, be cordial and reasonable, and get a helpful representative on their side. 

“Short of that, your best option is to escalate, since it is a lot easier for supervisors or corporate offices to waive early termination fees. There are definitely steps past that, but that’s the starting point.”

It’s important for consumers to remember that they’re agreeing to a contract when they sign up for any service, even if they’re simply acknowledging that they understand what a representative is telling them on the phone. Kurland says this is especially true when companies offer introductory or discounted rates.

“Before you say yes to a special rate or promotion, ask the rep to email you a copy of the agreement or where you can find the terms and conditions on the company’s website,” he said. “As they say, an ounce of prevention is worth a pound of cure. Until the federal government puts down the hammer on early termination fees all the way, companies are still going to use them to their advantage when and where they can.”

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