[IP] more on Locked In a Cell: How Cell Phone Early Termination Fees Hurt Consumers
[My experience with Cell Companies is not what Gerry describes. I
always supply the phone since I am not happy with the cell phones
sold in the USA. Yet I am tied up with 1 or 2 year contracts with
$175 cancellation agreements. Why?? djf]
Begin forwarded message:
From: Gerry Faulhaber <gerry-faulhaber@xxxxxxxxx>
Date: October 9, 2005 1:13:21 PM EDT
To: dave@xxxxxxxxxx
Subject: Re: [IP] Locked In a Cell: How Cell Phone Early Termination
Fees Hurt Consumers
Dave [for IP]--
Re: cell phone contracts. I think the way this works is that you can
get a cellphone at a below-market price from your service provider in
return for a one- or two-year contract, OR you can buy your phone
elsewhere and get the service without a contract (or maybe a contract
of shorter duration). So this is a trade-off, you get a price break
on your instrument in return for a longer contract. But you don't
have to take this; you can still avoid the lengthy contract by buying
your own phone at a market price.
Why is this a problem? If you don't like the long contract, then
don't take the price break on the phone. Seems to me a perfectly
legit deal.
The practice of automatic contract renewal I think is sleazy, but it
is very widespread. Even Consumer Reports automatically re-ups my
subscription on my credit card every year, and CR is a very legit
outfit.
Now let's be honest here. If you sign a contract to get the cheaper
phone, then as soon as you actually have the phone you want to get
out of the contract, and this seems to be what this is all about.
"Gimme the cheap phone, then I'll whine about how I'm being exploited
by a long-term contract". Pretty cheesy.
Professor Gerald R. Faulhaber
Business and Public Policy Dept.
Wharton School, University of Pennsylvania
Philadelphia, PA 19104
----- Original Message ----- From: "David Farber" <dave@xxxxxxxxxx>
To: "Ip Ip" <ip@xxxxxxxxxxxxxx>
Sent: Saturday, October 08, 2005 10:05 PM
Subject: [IP] Locked In a Cell: How Cell Phone Early Termination Fees
Hurt Consumers
Begin forwarded message:
From: Monty Solomon <monty@xxxxxxxxxx>
Date: October 5, 2005 3:00:50 AM EDT
To: undisclosed-recipient:;
Subject: Locked In a Cell: How Cell Phone Early Termination Fees
Hurt Consumers
Locked In a Cell: How Cell Phone Early Termination Fees Hurt Consumers
August 2005
Executive Summary
http://masspirg.org/MA.asp?id2=18535
Press Release
http://masspirg.org/MA.asp?id2=18541
Full Report
http://masspirg.org/reports/lockedinacell05.pdf
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