Verizon rumored to be raising ETF to combat scammers
Are you thinking about jumping on the new Storm2 BOGO deal, selling one on eBay and canceling a line? Well, we already made it pretty clear that doing so really isn’t all that profitable, but just in case you were thinking of pulling something similar to this in the future, we’re hearing Verizon is stepping it up in the ETF department. The rumor is, that starting November 15, Verizon is going to raise its ETF for high-end phones, such as the Storm2 and Droid, to $350. The ETF would then decrease by $5/mo. We haven’t confirmed it yet, but it certainly makes sense because of how easy it is to rip a carrier off by purchasing a new smartphone on contract, canceling the line, paying the termination fee and selling the phone for twice or three times what you paid. If it pans out, we really can’t blame Verizon for trying to recover the subsidies they’d lose on early contract terminations. Scammers beware!
this is true, but it will drop $10/month, not 5.
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So your options are:
-Buy the phone at full retail on a month to month plan and not have to worry about a 2 year contract or an ETF
or
-Sign a 2 year contract, pay a subsidized price for a phone, and pay a $350 termination fee if you cancel (that is prorated every month of your contract)
Now, this is very simple, don’t sign a 2 year contract if you don’t plan to fulfill it. If you think you might leave and don’t want to pay an ETF, buy the phone at full retail and go month 2 month. If something happens in your life that you have to cancel, Verizon has several policies in effect that would waive your ETF under certain circumstances. The only people I can see that would complain about this are people who exploit the current system.
Verizon still allows a 1 year contract. That’s what I’m on. I can handle anything for a year. You still get a phone discount, just not as much as the 2 year. And, you have the option to walk after a year and sell your phone.
The etf will change for advanced devices but it will decrease by $10 each month not $5. Current users contract etf’s will not change.
It sucks that it will cost more if you want to cancel your contract, but it is not verizons fault for covering there ass. I am a verizon customer and I love the fact that it only cost $175 to cancel my plan, but the only people who are to blame are the people that buy the new phones off of craigslist and ebay. Stolen profit. Id be pretty pist if it was happening to my company.
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Yeah.. not likely. Large ETF or not, let’s not act like VZW is losing money. The large ETF proposal is just so they can make even more money. Anyone who thinks otherwise has blinders on.
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I see the peasants are cheering on the lord of the manor again.
The real question ought to be why smartphone prices and phone plans are so much more expensive in the US than in Europe. If Vodafone can provide unlimited text, landline calls and data plus 600 mobile minutes a month for £35 plus tax with a free Blackberry, why does Verizon have to charge more than twice that plus $200 for the phone AND a Vodafone-sized ETF to provide something roughly comparable?
If Verizon is going to raise the ETF to European levels then we ought to see something else in return, like European phone charges and plan rates.
I think there’s a broader competitive issue here as well. Overall our industry in the US is too concentrated in that Verizon’s really the only truly national network. Hopefully AT&T will make the most of the Alltel divestitures but the way recent spectrum auctions are going Verizon is continuing to clean up. In Europe, spectrum was sold fairly evenly and in national rather than regional licenses. With our arrangements by contrast, Verizon gouge because they can get away with it.
Most of it is because the size of our country is FAR FAR FAR larger than all those European countries COMBINED together. The cost to power run and manage a bigger network is obviously going to be a lot more.
EFT = Early Termination Fee
I sure wish BGR knew how to write in English for everyone to understand.
ETF….
What company would pay out a $400 subsidy… and then only charge $300 for early termination?????
Senseless.
Shouldn’t the 2 amounts (at least) be equal????
i really hope they do this….lol i have 7 lines with verizon and its already high enough to have em turned off but if it for scammers go ahead
When I worked for AT&T, i told my boss about that with the Iphone 3GS. No wonder VZN is number one in some people s eyes.
I was going to buy the Droid, but I doubt that I will now.
The $400 subsidy is a scam. They mark the phone up to some high price and then say they’re giving you a huge discount, but they really pay a lot less for the phones.
The phone’s aren’t marked up…at least at an agent/retailer.
They pay $508 for the storm 2.
They also hate BOGO…because they actually lose money if they try and match vzw corp or online prices.
actually the full retail price on all the price tags is the actual price that the carrier has paid. Above he said the retailers pay 508 for the storm 2. the price at a vzw store is 499.99 full retail.
look at verizon communications annual report. they even show you where they lose close to 2 billion a year in equipment subsidies. that’s not something people just make up, it’s a fact.
now VZW and most other companies make money on the service, but think of it this way, if they give a 400 subsidy on 100,000 phones, and you cancel all of those, how much money is lost.
it’s not simple math, you have to factor in what it costs to operate their business.
Get educated on the business side instead of looking at the short sighted side of things and worry about something that might not even effect you. sign a 1 year, buy it at full retail. you have more options than a 2 year contract.
Here’s my issue. I bought a Tour in July, it worked great, up until a month or so ago, now it constantly reboots (which has been taking about 10 minutes to do), having issues with the trackball, and it is running slower than hell. Best verizon will do is replace it with another Tour (which I’m so pissed about I don’t want another) or either hit me with the etf or pay full retail, what a joke vzw customer service has become. I’m not trying to pull a scam, I just would like a dependable device to rely on while I’m over the road.
I think you have to have like 4 replacements before they’ll even consider a different phone, but I know it’s been done.
So, you’re just whining because after 3 months you’re bored with the phone, want a Droid, and are mad because they are replacing your Tour?
I’m pissed the storm 1 update made the phone pretty much as good as the storm 2 but without wifi, so I’m considering not paying retail for a droid and waiting for my an upgrade on my account in Feb
Les, you obviously have never been any other U.S. Carrier. VZW has more options than any other carrier when it comes to resolving phone issues. At least you have the option to walk into any corporate store and have a rep look at your phone and trouble shoot it. In most cases warranty exchanges are done in store, and if they are not in stock you can get it within 2 buisness days. Hmmmm to think about it my new flat screen went out the other day and I was so pissed they gave me the same model instead of the different one…..dude it just doesn’t happen. A warranty is a warranty not a oh my track ball stopped working.. let me whine and get a whole new device. I can only imagine the scamming that would go one if you had your way.
you had 30 days to return the phone.
30 days = pay $175 ETF and keep phone
100% verified by multiple Verizon employees
my previous post did not post correctly:
BEFORE 30 days = return the phone
AFTER 30 days = pay ETF and keep phone
100% verified by multiple Verizon employees
I don’t do this, but why are people who do this called scammers? The ETF fee is in place and that’s the price they pay. Scamming would be finding some way to keep the phone without paying the fee imo
Yea I totally agree with you sampsy. Verizon wrote the terms of service (including the ETF) to make sure that they get paid for their subsidies in the event that someone cancels early. It’s not a scam if someone were to use that to their advantage. It’s really Verizon’s fault for not writing it up properly, maybe selling the phones a little too cheap in the first place.
Although this is a new worthy to be covered by BGR, I certainly do not like where BGR stands on this issue. People who pay the ETF and turn around and sell their phones on ebay are NOT scammers. It’s no different than any other businesses, selling an item at a more expensive price than paid for. I don’t understand how that is scamming.
Yes, how DARE Verizon expect people to be HONEST!
Generally speaking, I’ve had an old insurance plan for awhile now, it recently changed to become higher (bought my sister a samsung rogue). So basically, my insurace was 5 bucks with a $50 replacement fee. Hers is 6 bucks a month with a $89 replacement fee.
I still get to keep my insurance after the change.
So I’m guessing that this new ETF policy is for people that activate smartphone contracts AFTER they initiate the change.
Hey BGR, any word on when this is happening?
Not a rumor. Here is the exact verbage from the VZW systems:
ETF Policy
My Favorites | Print
Updated:
11/03/2009 16:35:51|
Policy & Eligibility
If a customer cancels service early or if Verizon Wireless terminates their service for good cause, then the customer is charged an ETF (Early Termination Fee) per line of up to:
$175, or
$350 (if the customer’s contract term results from the purchase of an advanced device after 11/14/2009).
Note:
The up to $350 ETF for advanced devices is not to be discussed with customers prior to the 11/15/2009 launch. In the event a customer receives a Direct Mail Letter which references the up to $350 ETF and contacts Verizon Wireless, Representatives can assist the customer and explain the up to $350 ETF is for advanced device purchases effective 11/15/2009.
The higher ETF associated with advanced device purchases fairly reflects the higher costs associated with offering feature rich advanced devices to customers at attractive prices and investing in our network to support these devices.
The $175 ETF decreases by $5 a month and the $350 ETF decreases by $10 a month for each full month the customer completes.
The up to $350 ETF does not apply to CLEU (Corporate Liable End User) lines of businesses with a MAA (Major Account Agreement) and ECPD (Enterprise Customer Profile Database) profile, Government and Telemetry accounts.
Effective 11/15/2009, refer to advanced device website for devices that qualify as advanced.
I sure hope that “Exact Verbiage” you quoted from Verizon Wireless’ internal proprietary information is worth loosing your job over! I can confirm that what you have quoted is correct…. but I’m not about to put my high paying job with benefits at risk, just to leak information. Now…. Regarding the new etf’s, It’s true, VZW is trying to recoup some of the many millions of dollars in lost revenue from people getting high dollar phones, selling them on eBay, and then breaking their contracts. Can I fault VZW? No, they are a FOR PROFIT company, (which shares it’s profits with employees). Can I fault the consumer for being mad about increased etf fees either? No, of course not. I am both a VZW employee, and also a VZW customer, so I can understand both sides of the issue.
Worst case scenario, your call still goes through and doesn’t get dropped. Hint hint. Wink wink.
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Your city has a population of 30k. Interesting interpretation of “very large”.
You’re lucky to get ANY cell phone service over there. Frankly, I’m surprised you even have paved roads!
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@ SKiTz
LOL