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+ - Verizon Defends Doubling of Early Termination Fee-> 2

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I Don't Believe in Imaginary Property
I Don't Believe in Imaginary Property writes "Verizon is defending its decision to double its Early Termination Fee from $175 to $350, after being called to account by the FCC. They claim that it's because it allows them to offer more expensive phones with a lower up-front cost and that, because they prorate the fee depending on how much of your contract is left, they still lose money. Apparently doing something about the Verizon customer service horror stories isn't as good a way to retain customers as telling them that they have to pay several hundred dollars to leave."
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Verizon Defends Doubling of Early Termination Fee

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  • 1.Verizon picks an amount for the value of the phone (this would be the value that the phone would be sold for outright), call this number X.
    2.Verizon then picks an amount for the upfront cost of the phone (whatever Verizon thinks they need to sell it at), call this number Y.
    3.Take the number of months in the contract, call it Z.
    4.Take the number of months remaining in the contract, call it W.
    5.The ETF is then calculated as ((X - Y) / Z) * W.

    • 1.Verizon picks an amount for the value of the phone (this would be the value that the phone would be sold for outright), call this number X.
      2.Verizon then picks an amount for the upfront cost of the phone (whatever Verizon thinks they need to sell it at), call this number Y.
      3.Take the number of months in the contract, call it Z.
      4.Take the number of months remaining in the contract, call it W.
      5.The ETF is then calculated as ((X - Y) / Z) * W.

      This would be a great idea, but it means more people would be exiting the contract early, as it gets to its end. This would probably all add up to less income for the big companies. And then there is also the fuzzy of when exactly the customer 'terminated' their use of the contract. Was it when they used the service last? Was it the date the termination request was sent or the second they decided in their head to do so?

      People don't look at the termination fees when they buy a new phone/deal - they look a

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