Verizon Wireless is planning to increase its early termination fee starting on November 15, 2009 to $350 for advanced devices (David Coursey – PC World). While I can sympathize with Verizon Wireless in dealing with consumers who are canceling contracts, and paying termination fees, just to resell hardware at a profit. This cannot be the sole motivator for this price increase. Verizon Wireless knows that it is going to catch a substantial number of good consumers who wish to legitimately change carriers for a variety of reasons and reap a decent financial reward.
I have been a longtime supporter of Verizon, and I use them as my preferred wireless carrier. However, I still feel they are wrong in this action. If Verizon Wireless wants to target hardware resellers then it certainly can charge a termination fee that is equal to the retail list price of the hardware device minus the amount paid at the start of the contact for all contracts canceled in the first six months. If the contract is canceled after the first six months, then the hardware cost should prorate to the end a life of the agreement. Alternatively, they can simply collect the hardware from the consumer and not charge any termination fee. This would give them additional hardware to certify and resell at a discount.
It certainly seems to me that Verizon Wireless is looking forward milking the consumer for more money and is using the hardware resellers as an excuse to do it. Maybe the model of subsidized hardware sales through wireless service contracts is fundamentally broken and the wireless carriers need to develop a different business model to meet the needs of their business and consumers. The wireless carriers need to stop punishing their customers and start delivering on quality service and treating the consumer with respect.