Thinking of giving your cell phone provider the axe?
Not to worry.
In this guide, we’re going to show you the best ways you can get out of your cell phone contract so that you can find something new without putting a huge hole in your finances.
We’ll start with general tips and then break things down for special scenarios or locations where other options might apply.
NOTE: This guide is packed with tips & tricks. Our team puts together guides just like it each week and you can receive them free when you join our mobile tech newsletter.
While having a phone in your pocket that's more powerful than the computers that sent us to the moon is awesome, our sleek smartphones come at a price. Often to the tune of hundreds of dollars.
To help offset costs--and lure in customers--many carriers will cut the price on their phones and lock you into an agreement. You get a massive discount on a phone and you pay it back over the course of a few years.
In other words, that smartphone you thought was $0 wasn’t so free after all.
Now imagine that after a few months, you’ve noticed you can’t place calls from your office, your phone isn’t quite what you expected or that you simply don’t use it as much as you thought you might.
So you call up to figure out your options and out comes the three most dreaded words in cell phone terminology--Early Termination Fee.
Phone carriers would like you to believe that you have two options:
- Keep service until your contract is up
- Fork over hundreds of dollars to go elsewhere
Fortunately, this isn’t the case.
Not only do you have options to get out of your cell phone contract, but many of them are quite simple as well.
Before we get into the details, keep in mind that not every cancellation fee is an Early Termination Fee.
Many carriers are starting new programs centered around device payment plans. Instead of getting a discount and long-term contract, you pay a small monthly fee in addition to your service fees until the cost of the phone is paid off.
It’s no different than a car payment or a mortgage. You’re just financed through the phone provider.
In most cases, if you cancel and do not or are not able to return the phone in like-new condition, you will be charged the remaining cost of the device plus fees.
This is different from an Early Termination Fee. While you might not be able to use all of the follow tactics to avoid these specific fees, you'll still find great tips for reducing the overall costs of cancelling.
Strategies that you can use to get off the hook will depend on the reasons you use to get out of your contract.
Although the list of reasons for why you might want to get out of your contract could go on for days, the important thing is determining whether your reason justifies nullifying a legally binding contract.
A few of the most popular reasons (legit or otherwise) include:
- You’re not happy with your service
- You cannot afford the cost of service
- You’re looking for a new device or carrier
- You’re planning to relocate
- You’re not using your device as much as you had anticipated
- You’ve experienced a life change that requires altering or cancelling your plan
While there are plenty of legal and effective options for getting out of your cell phone contract, there needs to be a legitimate reason if you expect the process to proceed smoothly.
In most cases, you cannot simply phone up a service representative and say you just don’t feel like having their service. Though, even then, you’ll still find a few options that might work.
Options to Consider Before You Cancel Your Cellphone Contract
Before jumping in headfirst into calls or trading contracts, there are a few things to consider.
The most important thing is calculating your possible Early Termination Fees.
If you only have a single line and you’re near the end of your contract, the total might not be as fearsome as you’d think.
The CRTC Wireless Code outlines the steps for figuring out your ETF.
If you have received a subsidy on your device, the Wireless Code states:
"The early cancellation fee must not exceed the value of the device subsidy. The early cancellation fee must be reduced by an equal amount each month, for the lesser of 24 months or the total number of months in the contract term, such that the early cancellation fee is reduced to $0 by the end of the period."
Keep in mind, this applies to every device on the account.
If you did not receive a subsidy on your device, the Wireless Code states:
"a. for fixed-term contracts: The early cancellation fee must not exceed the lesser of $50 or 10 percent of the minimum monthly charge for the remaining months of the contract, up to a maximum of 24 months. The early cancellation fee must be reduced to $0 by the end of the period.
b. for indeterminate contracts: A service provider must not charge an early cancellation fee."
Unsure how to calculate your ETF? Calling your provider is the easiest and most accurate option available. They are required to help you assess any fees to help you make an informed decision before you cancel.
Should you find that your fees are low enough to ride out the remainder of your contract, you can use the following options to reduce the costs of waiting.
Downgrade your plan or plan features
Whether you signed up during a promotion or simply didn't know exactly what you needed, it's very common to find that you don't actually use all of the data, minutes or features that you're paying for each month.
Related: Use our free tool to compare plans and find the one that's right for you.
If you're near the end of your contract, dropping your service plan to the lowest rate possible and continuing to pay for a few months might be cheaper than paying the ETF.
NOTE: Some carriers require a base-level of service or a minimum monthly charge to count toward reducing your ETF. If you’re going to try this trick, you should call your provider before downgrading to avoid unexpected complications.
Place a hold on your service
If you’re happy with your service but simply cannot afford it--or if you’re taking an extended vacation--many carriers will allow you to place a hold on your account or place it into vacation status.
How this works will differ between carriers. Just remember, many carriers will not deduct from your ETF without a monthly payment.
We’ve scoured the Internet and discussion boards and looked over contracts from popular providers around the world. Here you’ll find some of the best tools at your disposal for getting out of your cell phone contract.
Even using these methods, you’ll still need a little persistence.
Don’t be afraid to try a few different options.
If you’re calling or writing to your service provider, be sure to keep notes on who you talked to and any options discussed. This can help to further your case if things drag on.
However, with a little time and effort, you should soon be saying goodbye to that pesky contract and keeping a substantial chunk of change in your wallet.
Use Lackluster Service to Cancel Fee-Free
One of the most straight-forward options for getting out of your contract is proving that the service you’re paying for is unreliable.
While it might take a little time, you should make a point to log any dropped calls, undelivered messages or service outages. Report them periodically to your carrier to establish a record of events.
If you need to, make a point to use your device more in areas where coverage is weak.
We’re not talking about going to the next town or anything. You probably have a few spots around the house that seem to be black holes for cellular signals.
Use them to your advantage.
If you can find a few areas around places you commonly visit, this will help if your carrier proposes to resolve the problem with a femtocell tower or other fix.
Once you have proof of inconsistent service over the course of a couple weeks, get customer service on the line and see what they’ll do for you.
Keep in mind that some carriers might require further analysis from an engineer or other source. While this won’t cost you anything, it might put a kink in the plan if the only place that calls drop is in the upstairs closet.
If you feel you have presented a valid case and still are not getting results, you should file a complaint with the Commissioner for Complaints for Telecommunications Services (CCTS).
This step alone has proven one of the most successful in comments on our previous guide and various forums and discussion boards across the Internet.
Invoke the Material Adverse Clause
Most contracts are covered universally by what’s known as the Material Adverse Clause.
The Material Adverse Clause allows you to terminate a contract with no penalty should the terms and conditions of the contract change and you don’t agree to the changes. Objections must be made within 30 days to be valid.
For mobile service contracts, there are certain aspects that are not covered. One of the biggest being taxes. Unfortunately, the carrier has no control over this.
However, increased text messaging fees, changes to late payment fees or other items are fair game. Keep an eye on your bill, read any additions and pounce the moment that you get the chance.
It might require escalation to a supervisor, as many service reps aren’t educated on these legal loopholes, but with persistence, this is one of the most effective tools at your disposal.
Transfer Your Contract to Someone Else
Most cell phone carriers don’t care who’s paying the bill as long as someone is paying on time.
Find someone willing to assume your contract and you're free to go without jumping through loopholes or dealing with customer service!
Once the contract is transferred, you are clear of any liability and obligation.
Buyers get the convenience of a short-term contract. You get to walk away with no repercussions. The carrier still gets their money each month. It’s a win-win-win.
Numerous websites have popped up around the world to help buyers and sellers work out deals and streamline the process.
A couple popular choices include:
Reviews indicate sellers seem to have the best luck when they include a phone with their contract. If you still have trouble finding someone to assume your contract, many sites allow you to sweeten the deal with a small cash incentive too.
While you might have to pay a small fee to list and another when the deal closes, this is substantially cheaper than most ETF fees.
If you’re planning to find service with another provider, many sites also offer a discount on fees when you buy someone else's contract after selling your own.
Sell Your Handset to Offset Termination Costs
If you're not looking to switch to another provider and bring your device with you--or you're moving to an area where your device will no longer function--you might find that you can sell the handset or tablet and recoup the costs of the Early Termination Fee. If you've upgraded recently, paid off a substantial portion of your subsidy already or happen to have a flagship device, you might even make a little profit.
Just be sure to pay the ETF, or the person who your phone might end up on the blacklist and you could have an angry buyer to deal with.
Popular websites for selling used mobile devices include:
Browsing through forums or article comments, you’re bound to see some creative solutions for cutting ties with your cellphone carrier. We’ve dug into the rules and regulations to address a few of the most common and provide you with answers.
Nearly every carrier has a clause that deals with military deployments or relocating due to military service.
Whether you’re simply looking to place a hold on your contract or cancel completely, giving them a call will often yield results. However, you have to be prepared to backup your request with documentation.
Your commanding officer or field office should be able to provide with any forms necessary.
Then you’re just a quick fax away from mobile freedom.
I Can’t Pay If I’m Dead Right?!
This one comes up time and time again.
“Oh just have a family member call up and claim you died/lost an arm/are in a coma!” Sounds great! Sort of...
In reality, the first thing they will request is an official death declaration, obituary, medical bills or other proof.
Even if you could work something out, you’re still technically breaking a number of laws.
Don’t try this one. It’ll only lead to trouble.
Here are a few additional links to tools that might help you break free of your contract.
The ETF Policies of Popular Carriers:
So there you have it! Everything you need to negotiate your way out of your existing cell phone contract and move on to clearer, faster, better pastures.
Regulations change and providers are always looking to close loopholes and keep customers onboard, so if you encounter any problems, be persistent and don’t hesitate to ask questions!
We’d love for this guide to be as valuable as possible for the community and anyone out there trying to extricate themselves from the clutches of their contracts. To do that, we need your help.
Here’s what you can do to get involved:
1. Ask Questions. Leave a comment below or head to our Q&A forum.
2. Share Your Experience. If you have anything to add, share it in the comments below. We'd love to hear from you!
3. Tell Your Friends. Share this on Facebook or Twitter.
P.S. If you’re looking to pick up a new device with the money you saved avoiding your ETFs, we’ve got reviews on the best phones including in-depth review summaries. You can also compare rate plans here.