Consumer Alert

No easy out on cellphone contracts. Consider prepaid.

When it comes to the business of contracts for wireless phone service, consumers often find themselves struggling with the consequences of a two-year commitment. It’s a commitment that can be broken, but at a steep price.

Consumers sign these contracts with stiff terms because they get rewarded with big discounts on the latest and greatest phones. Getting a deal that requires a contract means being bound by an agreement that could cost hundreds of dollars to break.

But a couple of readers recently asked what happens if the wireless provider’s service isn’t up to snuff? Would that allow a contract to be voided without penalty? The simple answer: No.


“The consumer does not have grounds to void the contract without paying the termination fee,” says Barbara Anthony, who heads the Massachusetts ­Office of Consumer Affairs and Business Regulation.

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That doesn’t mean giving up, however. Complain to the company about dropped calls, poor service, and any other problems and ask what they will do to fix it. If your complaints over time make a good case, they might just release you from the contract without penalty.

If the reception in your home or business is a problem, one solution is a network extender. It’s a device that uses your Internet connection to create an area of better coverage within range of the device. While the extender can cost $100 or more, it’s worth asking your carrier if they might provide one.

Before you are lured by the subsidized phone that comes with a contractual commitment, you could consider a no-contract device. Prepay phones — once aimed at those whose credit was too poor to get a contract — are now widely available from multiple carriers for those who don’t like being bound to terms.

But there are catches. You have to be sure you’ve bought enough airtime to use when you need it, the choice of phones is often limited, customer service can be nonexistent, and the cost per-minute of a call is typically much higher.


The flip side, of course, is you can switch carriers without penalty. So, think hard before you commit to a contract and understand what you’re agreeing to.

Mitch Lipka has been helping consumers for two decades. He also writes the Consumer Alert blog on Mitch can be reached at Follow him on Twitter @mitchlipka.