What is a cancellation fee?

About cancellation fees

If you sign a long-term contract with a wireless provider, be sure to read the contract carefully to find out if an early cancellation fee is involved. A cancellation fee is a penalty fee charged if a user cancels phone service before the expiration date of the contract. Oftentimes, the cancellation fee can be upwards of a couple hundred of dollars.

Cellular phone contracts are normally for a period of one to two years. If you need shorter-term service, look for a provider that offers a month-to-month agreement with no contract.

If you find yourself wanting to cancel a contract with your wireless provider, your options may be limited. However, if you are canceling due to problems with your phone or your service, be sure to thoroughly explain your reasoning both over the phone and by written correspondence. Some providers let customers out of their contract if the customer can prove that the service is substandard.

Your only other legal recourse would be to read you contract completely and look for areas in which your wireless carrier may have breached the contract. For example, if it states in your contract that your rates will not be changed and your provider indeed changed the rates, that could be enough for you to legally cancel your contract without having to pay the cancellation fee.