Early termination fees continue to impact customer loyalty as a recent consumer survey by the U.S. Public Interest Research Group found that 47 percent of wireless customers would switch carriers to get lower rates and better service if they didn’t have to pay penalties for breaking their contracts. Early termination fees range between $150 and $240 depending on the carrier and average $170 across the industry.
“Consumers are captives locked in a cell by early termination fees, preventing them from shopping for better or cheaper cell-phone service,” said Ed Mierzwinski, consumer program director for U.S. PIRG. “No cell-phone company has to honor its promises if its customers can’t afford to shop around because of unfair penalties.”
Mierzwinski added that the survey found 77 percent of wireless consumers support the elimination of ETFs. An economic analysis found that ETFs paid by consumers and the potential benefits others have lost by not switching carriers due to ETFs have cost consumers more than $4.6 billion during the past three years.
The survey also noted that 36 percent of wireless consumers said ETFs had prevented them from switching carriers, and that 89 percent of consumers said ETFs were “a penalty to discourage switching cell-phone companies.”
The U.S. PIRG said the survey’s release coincided with a Federal Communications Commission review of a petition from the wireless industry that, if granted, would pre-empt state oversight of ETFs. On Thursday, a group of 14 Democratic House members led by Rep. Anthony Weiner (D-N.Y.) asked the FCC to reject the wireless-industry petition.
