Dumping ISP May Cost Customers $150

Dumpling$9 writes with a link to an article that seems to speak volumes about the modern consumer relationship with service providers. IBT reports on the outrageous fees facing users who drop their internet service contracts before they are up. "Pricing broadband competition can be difficult. Broadband is rarely priced as a stand-alone service. Whether offered by a telephone company or a cable company, it is usually bundled with other services such as voice and video. The advantage to the customer is easier billing and usually a price break. But the down side is if they drop one of the services to pursue a better deal elsewhere, they lose the discount ... It remains to be seen whether penalties for Internet customers will cut down on churn. Consumers Union in its annual cell phone survey found that nearly half of all cell phone subscribers who were considering switching carriers were deterred from doing so because of early termination penalties."

Comments

Yeah...sucks

[DogDude]

Yeah...sucks. This is a "duh" story. Of course, you don't have to sign a contract if you don't want to, and just pay more in the short term. This hasn't been news since Ma Bell was broken up.

Re:Yeah...sucks

[hazem]

This creditor is most likely a credit card company and I hardly doubt they want to discourage people from using the phone system.

Rather, they know that the people most likely to need the phone service are poor people without computers who have few other options. These people are more likely to be living hand-to-mouth and not have the money to make a payment until close to when their bill is due. These are the easiest people to screw over while they're down... either pay $15 to post an on-time payment, or send it by mail and pay a $30 late fee (oh yeah, and your new 39.9% interest rate).

They don't charge $15 to recoup fees. They do it because it will extract the most money possible from people who have the fewest options.

This is *news?*

[anomaly]

So, in summary, if you sign a contract which has a clause which requires a penalty for early termination, service providers charge you that penalty. Duh!

The business is very competitive, and there are lots of incentives to switch carriers. If you're not renegotiating with your cellular and broadband carriers when the contract comes close to ending, you're unwise.

I don't excuse the size of the fees, but they will be disclosed if you ask the terms of the agreement. Don't want to pay a fee? Don't sign up, or don't break the agreement.

Re:This is *news?*

[Grishnakh]

The business is very competitive, and there are lots of incentives to switch carriers. If you're not renegotiating with your cellular and broadband carriers when the contract comes close to ending, you're unwise.

I don't know about your country, but here in the US, there is very little competition for broadband. (Cellular is another story.) Most people have only two realistic options: cable or DSL, each from its respective monopoly. With each one, there's usually some discount for bundling, though the usefulness of bundling DSL is debatable since so many people have abandoned landlines in the past decade.

So if you get sick of your cable internet, your only option is probably DSL from your local phone monopoly. Here in the southwest, that means Qwest, with MSN as your ISP (yuk). It is possible to get a different ISP, but that'll cost you more money, probably more than your service with cable internet was. The way I see it, DSP is only useful if 1) you're really cheap, and are willing to put up with 256k and MSN just to save $10/month, or 2) you want to run your own server(s) at home and are willing to pay extra for that privelege (this is what those higher-price DSL ISPs have over everything else). For everyone else, there's cable.

Anyway, two or three choices isn't what I'd call "very competitive".

And I've never seen any option for "renegotiating" with any of these options. They're all flat-rate, and cost the same for everyone. It's not like cellular with all the wacky service plans, pricing schemes, and promotions.

Re:This is *news?*

[alisson]

Indeed. Utilities generally have no choice whatsoever. So, say you live in my area, and you want cable? Your choices are:
1) Comcast

Say you want land-line phone service? Your choices are:
1) Qwest

Say you want natural gas? Your choices are:
1) Center-point

Want electricity? Oh, gobs of choices here:
1) Xcel

Is this legal? Perfectly! Does it create competition? Not in any possible way. Does it always screw the customer, every time? Naturally. The US has essentially decided that as long as your monopoly only covers a county or two, it's not a monopoly. Because of course, no one's forcing me to live here. But if I choose to? My utility companies are forced on me.

Re:This is *news?*

[ptbarnett]

I've had several people screaming about their lawyers are going to sue us and so on... But I really doubt most of these people ever saw their money back

Forget the lawyers. Call your credit card issuer.

I paid for a year's DSL in advance (at a discount) from a local DSL provider that had a good reputation. They even agreed to a refund if I left before the year was up. But shortly thereafter, they were bought by another ISP that had a well-deserved bad reputation.

A few months later, my DSL went down for a week -- the second or third outage since the acquisition, but the longest one so far. It was some sort of administrative screwup that cut off the ISP's link to the rest of the 'Net. I had already planned to change providers when my year's pre-paid service was up. But, the long outage was enough to accelerate my switch.

Fortunately, I had a second phone line at the time. So, I didn't have to wait for them to release their claim on my primary line. For a brief time, I actually had DSL from two different ISP's on the two different lines. But, when I called to cancel my service and request a refund, they replied: "no refunds". I pointed out my agreement with the ISP they bought, and they were unmoved. I offered them one last chance, saying that I would get my refund -- the only issue was whether they got dinged by their credit card processor for a charge-back.

They still refused, so I called American Express -- who I used to pay the original bill. I explained the situation to Amex, and their only question was: "did you sign anything that committed you to pay for a year of service?" I said "no" -- knowing they would pose the same question to the ISP. I also knew that the ISP couldn't produce any such agreement.

Within a week, American Express credited my account for an amount that was pro-rated according to the remaining (unused) months of service.

My point: if you can, pay your ISP with a credit card. It gives you a lot more leverage, because they are bound by the merchant agreement.

Bah.

[SatanicPuppy]

I am the anti-consumer, when it comes to broadband. I will dump all service at the drop of a hat, and switch to a competitor...The whole deal. I mean, cable, phone, I don't care. I have all the equipment to switch between Direct TV and Cable, and Cable and DSL, Phone and IPtelephony (direct TV is bundled through the phone company in my area), and whichever company pisses me off, I dump 'em.

When we moved to a new place, the first thing I did was run cable to my office. Not because I want to watch TV there, but because the first time the phone company pisses me off, I dump 'em.

I think they're scared of me...Last time my service went down (morons from the phone company screwed up my settings working on a neighbors equipment), they told me three days. I told them if it wasn't done before I got home from work the next day, I was calling the cable company...It was done when I went home for lunch.

These days, if you have more than one option, make the most of it...Treat them like the bitches they are, and make them grovel for your money.

Why do we do these things?

[writermike]

I am waiting for the corporate apologists to show up.

"Hey! Why don't you read the fine print."
"Gimp! Research your damn options and pay the extra $60/month for a contract-free options."
"GUH! I have no patience for stupid consumers."

But, seriously folks, why are these things okay?

Why is small, difficult-to-read fine print okay?
Why can't features be in fine print gotchas be in large print?
Why is it that a company can advertise something as true that others can show to be false?
Why can a company call themselves "perfect" when it's not?
Why is it okay that a company obfuscates things from their potential consumers?

But, I know, I'm stupid because I didn't understand the legalese. I'm an ass because I didn't pay the extra fee for the contract-free option. I'm stupid because I didn't pay the extra $60/month.

Of course, I'm stupid until one of these little things hits the one that accuses me. Then they're like, "HeeeeeY! WTF, yo?"

As though...

m

use file-sharing against them

[solitarian]

It's easy to get your ISP to drop you.
download a lot of non-copyrighted material (you don't want to get in trouble) off of a file-sharing network. they will get rid of you and you won't be responsible for the disconnect charge.
easy.

You don't always have to sign a contract.

[PeterChenoweth]

Did anyone try asking?

I have Dish Network for TV. When I signed up, the phone rep wanted me to sign a 2 year contract. I simply told them that I wasn't interested, and so they countered with a 1 year contract. Didn't really feel like that either, and so they finally offered a no-contract plan but required like a $49 activation fee. Fine by me.

Same deal with Cingular. They say a 2 year contract is required, but it isn't. All you have to do is ask for less. They'll do a 1 year and might charge you $25 or $50 more for the phone. Big deal. Bring your own phone and tell them you want a month-to-month plan, and they'll do that too.

Same deal with Verizon DSL. They have a month-to-month plan with DSL that costs a couple bucks a month more than the contract price. You just have to ask for it.

The point is, you have to stand up for your rights as a consumer. Tell the company, "I'm here, I'd like to pay for your services, but your terms are unacceptable. What can you do about it?" If they won't bend, find another company that will. I have no sympathy for people that blindly sign contracts and then whine about the consequences later.

Dumping the ISP may cost the consumer, but what if

[Organic Brain Damage]

the ISP dumps the consumer?

I've got 3 friends who have had their Cable Modems turned off because "they used excessive bandwidth." In those cases, I suspect the early termination fees are not recoverable. If that's the way it works, and you want out, just write up a little program that downloads lots of big files...put it in an infinite loop and voila...in a month or two, the ISP will cancel you.