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!
Actually it’s $10/month for the $350 ETF and still the same $5 for the $175 ETF.
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I would be fine with it if these jerks would actually let people upgrade when new stuff comes out and not piss them off by making them hold onto a phone that came out less then 2 years ago and is already behind the 8 ball. I.E. Storm 1 and the Curve 8330.
Bring it on BIG RED!
So, since it says Nov 15th, it’s best to get a droid before then? And if Verizon forces new terms on existing contract holders then you can get out without any ETF since this will be a material adverse effect?
I’m sure this will be a gray area if they force the new ETF on existing contract holders. Since it doesn’t really affect your monthly bill it will affect you if you are someone who breaks contracts often. I don’t know I’m just rambling. *yawn*
I did this with the 3gS like CRAZY, turns out it does actually make me 100+ dollars a pop, but SO much hassle to cancel the line.
As usual, I’m sure that at&t will follow, especially with the iPhone.
I think it needs to be done a little different. Some honest people may for uncontrollable reasons have to early terminate a line, Those people will be hosed. I agree that VZW should do something because I hate scammers I just dont know if this is the right way. Although it may be the only way.
Im thinking -10/mo only accounts to 120.00/yr leaving 230.00 even after the first year. I think maybe it should be 350.00 the 1st 3/mo’s then drop to 250.00, then down to the standard 175 after the initial 6 months. Or something close to that maybe longer time frames like 6 months instead of 3 months. I hope there is some sort of clause in there where they will evaluate early terminations on a case by case basis.
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One more thought, cant VZW require the phone be returned with in a certain amount of time if the contract is terminated to early?
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Im talking about requiring the phone be returned to the store or you will be billed full retail for the phone. 600.00 plus early termination of 175.00. Say with in a 2-3 month period. That would discourage the scammers from doing what they are doing. The phone would be worthless to VZW if it were sold and not returned where it can be refurbished or what ever.
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That sounds illegal but I’m not sure, after the trial period which is plenty generous you are liable
I wouldn’t know the legalities of it at all but requiring the phone be returned to the store if you did an eraly termination with in a 3 mo period would discourage the jerks causing this issue in the 1st place. The 30 day return/trial period, that is just for the phone and not the 2 year service agreement right? so you have would go back to your old phone or pick a different one.
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They do give you 30 days to try it out, that ’s the same as their trial period for new subs
paying people to process all the returned phonescosts a lot more money than raising the ETF on the customers
This ridiculously anti-consumer. I’ve been looking forward to the HTC Touch Pro2, and now the Motorola Droid, and I’ve been with Verizon for 6+ years. If they’re going to pull this crap, it will be the final straw in destroying my loyalty to VZ. I’m really getting tired of they way they treat their customers like revenue streams to be squeezed for every last cent. And the thing is, I generally don’t balk at signing 2 year contracts, because I know I’m never going to be without a cell-phone. But increasing beyond $175 is F’ing ridiculous.
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No it’s not. Smartphones cost way to much. You signed a contract, and you will need to pay if you break it. You had 30 days to try it out. Cell networks pay the full price of the phone. They sell it at the 2 year price and make up for it in the 2 years of your contract. If you cancel, the 175 ETF is not enough to pay for the phone. This is only for the new smartphones. And if you get the phone on Friday and the ETF is still 175, then it won’t go up to 350 because of the contract.
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Yes, it *is* “unfair”. Exactly what good does a BOGO offer give to an INDIVIDUAL – a person not in a relationship or marriage? In other words, the “deals” that these carriers constantly offer penalizes anyone NOT taking the BOGO offer…because they don’t get SQUAT in terms of an alternate. So individuals take the only offer they are given at all, the BOGO, and sell the handset in order to gain *some* form of the benefit that was given to their paired / family unit peers…but not to them.
You [& Verizon / Sprint / T-Mobile / et al.] want to reduce the BOGO/ETF “scam”?? GIVE INDIVIDUAL USERS SOME FORM OF DISCOUNT IN THE SAME MANNER THAT YOU [THEY] GIVE TO PARTNERS / COUPLES / FAMILIES. Then the individual user won’t have to attempt to use the BOGO offer in some ‘invalid’ manner in order to gain some form of discount…and everyone will be happy!
@At203:
“…they treat their customers like revenue streams…”
Uh… last time I checked, the customer is their revenue stream. There’s no flood of charitable donations or government bailout money coming in through the door. Did you think they provide you a service because you pay them and they profit from it, or because they think you’re a swell guy?
So you are saying this will never really affect you but you bitch about it anyway. This is life sir, you should try to get out more.
First the Fat Boys break up now this…. and this
http://www.engadgetmobile.com/2009/11/02/verizon-to-charge-for-exchange-access-on-the-droid-probably-on/. I’m truly surprised they didn’t make an Android data plan to make up for the $10 they won’t be getting for VZW nav due to Google Maps
This does not surprise me. I think high end phones need this because a cell phone company looses way to much money when someone ends there contrac and the cell phone network is out a lot of money. Smartphones are not cheap. At least Verizon is going to give us a variety of phones (15) this season.
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Lol I’m in canada with bell, about 11 months into a 3 year contract and they want $600 for me to cancel
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Rogers Early Cancellation Fee (ECF) has been 400$ or $20/month for the remainder of your contract which ever is less. This was implemented around 2 years ago, back then it was 200$ cdn which I had locked in.
So wondering here (and I am not scamming) but does this constitute a change in your contract that would allow you to cancel with, no penalty, your contract. I am having an awful experience now with VZW and my Storm 1. Was looking to pay the ETF but not if they raise it for my phone.
Does anyone know if the Storm 1 will be part of this raise in pricing?
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JML –
Verizon is American and British… Verizon Communications and Vodafone partnership. Its not German. German is T-Mobile and even then its not even German run, its American run and operated.
WOW, how you can support raising the ETF. It took years to get the ETF down to a reasonable price. Punish the masses to stop a few.
Actually most of the carriers raised the ETF’s at about the same time just like they did with text rates (collusion). I remember when I signed my original contracts the ETF was between $125-$150 now most ofthem are $175-$200
So buying a droid on friday, I’ll still have a $175 etf. Great!
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This is not just a “rumor” it is going to happen…I personally for one, think this will be good. Slam me if ya want. But people trying to “scam” the carrier has become rampant. And drives cost up. This is a deterrent for scammers. If you are honest..then this will have little to no effect on you. Because the honest ones fill their commitment to the contracts they sign.
I think the upset few are the one who took advantage of BOGO on multiple occasions who now won’t be seeing any returns from that venture. most people enter into a contract with intentions to honor it so the bump in fees won’t really concern them, I know when I saw it I didn’t care. The good thing is all postpay carriers have pro-rated ETF’s now
Am I correct to assume that this will only apply to new contracts? If not, then wouldn’t this change in the ETF essentially void my contract and allow me to get out without an ETF? It would be pretty funny if they made that mistake…. even though i doubt that would happen.
I was wondering the same thing, doubt it will have much of an affect due to the popularity of the carrier
Then there is no reason to sign a contract anymore. The Droid at $200 +$350 ETF is $550. Why would I ever lock myself into a contract again? I will just pay retail and be free to leave as I choose. If that is the direction they are going, I am fine with it. I do think they are punishing the few here. How does the FCC view this?
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Why would you not sign a contract? If the cost is the same regardless, then why not sign the contract and then the off chance you complete your term you saved $350. Seems foolish to buy it for full retail then sit there for two years anyway.
On the contrary, it makes more sense to sign the contract if you’re prepared to eat full price of the phone.
If you sign the contract and leave, it’s going to cost the same as what you paid up front.
Although, if you stay through any length of your contract, then buying it up front is going to be more expensive than signing a contract.
This is primarily because there is no difference in contract or contract-free monthly charges. Now if there was such a difference, it’d make more sense to buy it up front. That’s one good feature about T-Mobile’s new EM+ plans. Contract less pricing is cheaper than the contract pricing.
this can’t be right. this will reduce sales and future contracts. there is an easy solution here. instead of increase the ETF, they can increase the early termination fee or scale it so that they still capture the necessary profit.
barclay – ETF IS early termination fee. hahaha. too funny
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lol. it makes me wonder what he THOUGHT etf meant.
Exchange Traded fund?
The only problem I have is the wording of this article. How is it people are “scammers” for doing this if it’s currently totally legal?
C’mon. Verizon and other carriers “scam” us with ridiculous prices. So we get some back here and there… it’s getting even, not scamming.
agree
actually, i misread your post. i agree with the first paragraph, not the second.
Because something doesn’t have to be illegal to be a scam.
I cant really hate on Big red for this move. You can probably still sell your high end phone on EBAY for about the $350 they are charging if you cancel just after 30 days. However, I think Verizon should offer a choice of returning the high end phone AND then paying a minuscule ETF.
It’s fair if they raise the early termination fee, but if Verizon decides to change the rules about ETFs in any way, that’s just downright heartless. I mean the early termination fees are one thing, but DONT mess with my precious ETFs.
fair, maybe. but if other carriers don’t do it, then it’s a bad idea.
This is way too high. Build costs for smart phones are under $190 in most cases, then marked up to vzw, they will make money off of cancelled subs at this cost. With GSM under the hood along with CDMA is what’s making it such a popular market. There are many Tours running on T-Mo and at&t. Sounds like another way for the fat cats to buy their 12th home next year.
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I am one of those Tour owners who has Sprint (and intend to keep them) as well as a prepaid voice only GSM SIM card in my phone… And with the Tour only costing me $99 plus some tax, and an ETF of $200 (that prorates), if I was to get rid of it next month thats $300 for phone and ETF, the phone costs $499, and I could sell it for AT LEAST $400 in SF…. Making $100 profit for a person that wants Sprint or AT&T or T-Mobile.
Yea it’s useless to sign a contract anymore if you don’t plan on honoring it. Mush10, great you can add but also remember that fee pro-rates $10 every satisfied month. That ETF is only if you cancel, so if you aren’t planning on cancelling then that $350 does not apply.
However your math does prove the point of raising the ETF. The retail cost of this phone is going to be right around that price point. That being said, you pay $200, cancel your line and pay $350 ETF. Verizon hasn’t lost an additional $175 because you’re a scammer loser. Verizon is NOT in the business so people can scam them and get away with it. If you owned a business you would do everything in your power to be sure cheapskates didn’t try and get over on you right???
moral arguments are pointless, it really comes down to how their etf compares to other carriers’.
GetOverIt, I am not sure of your point here. It has nothing to do with whether I honor a contract or not. I am saying in my eyes I have no reason to sign one at this point. Give me the freedom of being out of contract and I will choose that. I would rather not have contracts with my phone company/cable company. I should be free to choose when I want to leave. In doing this, I am willing to pay unsubsidized pricing. There is a price at which the contract is worth it to me and I will pay the ETF and bail if necessary. However, there is a price it is no longer worth the subsidy.
And calling me a “scammer loser” is a little off base. I sell my phones because they have value when I am done. I do not try to add a line for a BOGO offer. Some people just like the freedom to leave when they want. While Verizon provides me with good service right now, I certainly do not feel the need to come on some blog a defend their every move.
I didn’t mean you are a scammer loser, sorry I did not specify “you” as in the people that do that.
The point I was trying to get across is either way you go, full retail with no contract or retail w/contract and ETF you’re at the same price point at least on the Droid. Actually less is you go on a contract and your ETF prorates each month. I understand some people don’t want the contract…that’s no problem. It’s the people that are trying to scam/make a quick buck because they feel like they are “owed” that for some reason based on their tenure with a company is obsured.