Droid Buyer Beware: Verizon to Double Early Termination Fees

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Senior Director of Federal Policy and the Washington Office

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FOR IMMEDIATE RELEASE
November 12, 2009

WASHINGTON, D.C. – With the recent launch of Verizon’s newest smartphone, the Droid, consumers should be aware starting Monday, November 15, 2009, Verizon will double its early termination fee to $350 for new customers who buy the Droid and other advanced smartphones. Verizon, the nation’s largest wireless phone service provider, will decrease the $350 fee by $10 a month over the course of the contract.

Joel Kelsey, policy analyst for Consumers Union, the nonprofit publisher of Consumer Reports magazine, said consumers interested in purchasing the new Droid should be aware of the upcoming fee hike.

“Verizon has been heavily promoting the Droid as the newest must-have phone, but what many people don’t know is, starting November 15, new customers will pay up to $350 to get out of their contract with the Droid and other Verizon smartphones,” Kelsey said. “This is a huge increase and an outrageous move by the country’s biggest wireless company. As with many cell phone deals, the early termination fee drops by an arbitrary amount each month over the life of the contract, but when the fee starts at $350, it’s a huge hurdle for consumers. Early termination fees are designed to lock people into long-term contracts. Any relation the fees have to discounts consumers receive on their cell phones should be clearly disclosed up front, so consumers know what kind of deal they’re getting.”

Media Contacts:
David Butler, 202-462-6262, Dbutler@consumer.org
Kristina Edmunson, 202-462-6262, Kedmunson@consumer.org