Passing costs onto the rest of us is pro consumer?
It looks like Verizon’s explanation that it still loses money even after the increased Early Termination Fees (ETF) just won’t please some advocacy groups like Free Press and Consumer Union. Verizon explained that while the increased ETF covers the raw cost of the phone, it does not cover other costs like marketing, commission, store costs, and network costs.
Consumer Union balked:
“Those are all costs that should be captured in monthly service, not given as excuses to punish subscribers who want to leave their service”
In other words, the majority of consumers who actually honor the contracts they signed should have to bear even more additional costs of those who want to bail out on their contract early. It really escapes me how this is “pro consumer”. I don’t see how this is different from eating out with 20 people and 2 people decide to leave early and only pay half of their bill. The restaurant wants the people leaving early to pay more of their share of the bill (not even all of it), but these advocacy groups want the government to slap the restaurant for daring to “punish” users by asking them to pay only part of what they owe.
Chris Riley says Verizon is “blowing smoke” based on the fact that Verizon is very profitable overall. So I guess by this logic, any company that has a positive balance sheet overall should be compelled to simply accept losses on some services.
These newer smartphones often cost over $600 and the customer is only being asked to pay $200 up front with a maximum of a $350 ETF. It’s like buying a $30,000 car and only putting $10,000 upfront with an agreement to pay monthly after that. Then someone wants to break the contract after a month and they’re complaining about a $15,000 penalty even though they still owe $20,000 and they want the government to slap the car company for daring to ask for $15,000.
I really hope that this isn’t becoming the new “American way”. Call me old fashioned, but I was always taught to pay for what I use and honor my word and contracts. I really do hope that common sense and reasoning will win out in the end.
Since when did subverting responsibility become un-American?
Last I check, parents blame teachers and television for their kids being messed. The teachers recommend drugs and then get all frantic when children seem to go Columbine. I have even seen articles where teachers are getting blamed for a child’s failing grades.
If I happen to get drunk and drive my car off a cliff, I sue the makers of the alcohol, the manufacturer of the car. I then turn around and sue the hospital for leaving scars after the operation. Me and some lawyer live pretty rich.
Sounds pretty American if you ask me.
I don’t think this is right and I definitely think some one should step up to the judicial system and say “This is wrong.” While I don’t see this happening for some time, I can always hope and pray.
The big thing that these people are complaining about is that AT&T and Sprint have smaller ETFs than Verizon. To me this is like complaining that Apple charges more for their product, so we should take them to court.
I personally would consider dropping AT&T for all the headache I have as other networks already provide 3G in my area and AT&T feels that there is no need and currently provides no plans for coverage. As my life appears to be taking a route out of AT&T coverage, perhaps I will complain about another vendor in the future.
I hear what you’re saying Michael, and too often it’s true. I just hope that most Americans will stand up and say NO to this.
As for lack of 3G coverage, that’s the nice thing about the U.S. wireless market. You have choices and you can switch to a provider that gives you more appropriate coverage.
Unless of course, you have one of those phones with the little piece of fruit on the back of it.
If my future were a bit more certain, I believe the Palm Pre would be the way for me to go. While I know it’s not as popular as the fruit phone, I still have a Tungsten T2 on my desk which I refuse to let go of. Even after I can’t get it to work with Windows 7, I still try to get an extra bit of usage out of it. Right now it is my out of the way Digital Frame which doesn’t scream to every other person in the room “Isn’t my family cute!!!”
The only think I don’t like is how expense the ETF is, but after dealing with AT&T for about two years, they have shown little in way of improvement to my area.
The ETF is expensive, but it’s cheaper than buying the phone up front which makes the ETF a loan with an effective negative interest rate and the cheapest loan you can get.
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