Call Kurtis: Do I Have to Pay Early Termination Fees?
Priya Prikita is ready to start a new life.
After her wedding, Prikita moved from her old apartment in San Mateo into a brand new Antelope home with her new husband.
“It’s our first home,” she said with a smile, “we’re very excited.”
She’s also starting a new job, so she said she’s as busy as ever.
Prikita realized shortly after the move that her Internet service with AT&T isn’t available in her new neighborhood, so she called the company.
Still with six months left on her one-year contract, AT&T wanted her to pay a $150 dollar early termination fee, or ETF, which she figured was about $60 more than the service itself, before taxes.
“It’s not my fault that they’re not providing service here, it really isn’t,” she said. “I feel like I’m getting penalized for it because I moved.”
She said she bought a $100 Internet modem from AT&T when she started the service, then paid $14.99 for each month of service. By her calculations, that meant she only owed $90, and she could fulfill her contract.
So why was AT&T asking for $150?
Many people don’t realize it, but if a customer is under contract with a company and moves to an area where they don’t have service, the company will slap them with an ETF.
“They had no justification to charge her a termination fee,” said contract law professor Brian Slocum of Pacific McGeorge School of Law.
Slocum read through the conditions of Prikita’s contract and said the company can’t hold her to the full $150 — especially if she wants to pay off the end of her contract.
“She offered to pay the rest of the fees, which they should have accepted,” he said. “They’re obligated to accept that.”
Richard Holober of the Consumer Federation of California has fought early termination fees in the past, and said the fees trap customers so they can’t take their business elsewhere.
“It’s all about hiding the ball, and then saying, ‘Gotcha. Now you’re gonna pay us,'” he said.
AT&T told CBS Sacramento the early termination fee is fair in this case.
“Customers agree to [Early Termination Fees] because customers are getting huge discounts on the price of products or services,” AT&T Director of Corporate Communications John Britton said. “After reviewing this charge, we provided a courtesy adjustment in this case.”
In this case, that seems to be true. Prikita’s DSL Basic Internet service is regularly priced at $25 a month, rather than the roughly $15 she’s been paying after purchasing her modem. Six months of service at that price comes out to $150.
After CBS Sacramento got involved, AT&T agreed to waive Prikita’s fee, much to her satisfaction.
“I’ve been a loyal customer for more than four years,” she said. “That’s the least I’d expect — customer service and understanding.”