Wading Through Mobile Phone Contracts

Wading Through Mobile Phone Contracts Mobile phone service providers cannot be faulted for making their services as appealing as possible to the largest number of consumers. That is, after all, why they are in business. Most offer free or greatly reduced-price phones, and some offer monthly rate plans that dramatically undercut their competitors. Some even offer curiously misnamed “unlimited” data plans. 

Unfortunately, many if not most of the highly-touted offerings are not quite as transparent about the terms and conditions to which a customer must agree when signing up. It is up to the prospective customer to read the fine print and follow all the asterisks before committing to the contract. Here are a few tips to help you better understand what you are agreeing to, and avoid surprises come bill time.

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Do you really want a contract plan?

Mobile phone service providers would absolutely love to have every one of their customers sign up for a multi-year service contract, so much so that they will usually give you a free phone just for signing up. While this sounds great, especially if you don’t have to pay anything up front, the devil, as they say, is in the details. Businesses don’t give anything away for free unless there is the promise of profit at some point.

 Whatever the actual cost would be for a competitive level of service, you will end up paying about £15 or more above that for your “free” phone for the duration of the contract. The more high-end mobile phones typically come with a contract of approximately thirty months. Do the math, and decide whether that free phone is worth it.

 As competition between providers increased, they began to realize that many people were unwilling to commit to a contract, particularly since poor service is not always considered justification for terminating an agreement. Pay as you go plans have grown increasingly popular, despite the fact that the customer has to provide their own mobile phone that is compatible with the provider’s network.

The customers’ saving grace has been that auction sites and independent distributors offer new, refurbished, and lightly used smartphones for every type of network, and at prices that are deeply discounted from manufacturer’s suggested prices.

You will need to know your seller, as well as their return and warranty policies, and you will have to pay up front for your phone, but you will save money, both in the purchase price of the phone and on your monthly bill. But what if you are already under contract? There are ways to work around that, as well, but you have to do your homework.

Offers to buy out your current contract

Providers know that virtually every customer has at least some areas in which they are less than ecstatic about their current provider’s service (including the provider’s own customers). In their attempts to draw customers from competitors, some mobile phone service providers will offer a cashback incentive, such as offering to reimburse customers for penalties charged for cancelling their agreement with another provider.

This can be quite appealing, as it leads the customer to believe that they won’t incur any out-of-pocket expenses as a result of the switch. Before basing a decision to switch on such a promise, be sure to read the terms and conditions of the new agreement. In most cases, you won’t receive the cashback immediately, and will be faced with having to pay the early-cancellation penalties while you wait for weeks, months, or even until the end of the new contract to receive your money.

Many providers will refund a set portion of the cashback on a monthly basis. Either way, you could end up paying the early termination penalty, long before you receive the full cashback promised. To make matters worse, simply switching from one mobile service provider to another has long been a complicated and often time-consuming undertaking. Customers have found themselves needing to perform tasks such as unlocking their phones and finding the devices’ unique code before they could switch.

The former is a technical feat that most people would be hesitant to undertake, while the latter requires a different method for virtually every phone. Both require a level of technical expertise that is beyond what can be reasonably expected of most mobile phone users. Fortunately, the UK telecommunications regulator Ofcom has proposed changes that will greatly simplify the process, thus freeing many customers to pursue service plans and providers that are more to their benefit.

Renegotiating your existing contract

Especially given the fact that failure to provide promised service is not usually recognized as justification for terminating a contract, you can rightfully assume that the contract you sign with a mobile phone service provider has been reviewed, vetted, and revised to the point where it is virtually iron-clad. What the service providers don’t want widely known, however, is that each provider has the equivalent of a customer retention department, responsible for convincing unhappy customers not to switch to another provider.

These customer retention representatives are often authorized to make concessions beyond those which are authorized by regular customer service representatives, if doing so convinces the customer not to leave. If you find that you have reached an impasse with a customer service representative over an issue, ask to speak with a supervisor or customer retention representative, and see what they will offer. You may be pleasantly surprised at the outcome.

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