Negotiating with and canceling contracts with cell phone companies is a frustrating and challenging task. They make it even more difficult by throwing in an ETF or early termination fee. Wireless providers subsidize the purchase of your cell phone with steep discounts at the time of purchase and then spread those costs out over the length of your contract. They ensure the return on those discounts with ETFs.

There are 4 basic strategies to getting out of a contract and avoiding the cancellation fees. Depending on your situation you can choose the one that best fits your situation. Canceling your contract is not going to be easy. You should expect to spend at least an hour or two on the phone with customer service. If you value your time, make sure it will be worth your effort before fighting the contract. Also pick a strategy that you are going to be able to stand behind. Flipping back and forth between strategies will only hurt your position.

Adverse Material Changes – A contract is an agreement that two parties agree to for an exchange of goods or services.  This agreement is established and agreed upon before the exchange.  If one party either does not live up to their end of the contract or tries to change it in a way that effects the other, the contract can be voided. 

Cell phone carriers often change their “terms and conditions” a couple of times a year.  These could be simple privacy issues or as much as a rate increase.  Typically for minor changes they include some legalese in you statement or possibly even in a separate mailing.  Once you receive these changes make sure they apply to you and your specific plan.  Then call the company and let them know that these changes “adversely affect you.”  They aren’t going to make it easy and will try very hard to talk you out of it, but when they change the contract they give you an out.  Stick to your guns, be polite, be unrelenting.

Out of Coverage Area – The FCC requires that if for whatever reason you don’t get service at your primary residence they have to let you out of the contract.  This one may require a little deception.  Find an area of poor service, you can check their coverage areas online.  Tell them that you just bought/rented a home in that area and that you no longer get coverage. 

Some of the providers will tell you that they have to check by sending a van out to test that specific area.  Hold firm, even if they come back and say there is service at the street (they never check inside the building) if you don’t have reception in the home you are clear.  With this strategy it often helps to say how disappointed you are that you cant keep them as your provider.  That way you are leaving a happy customer.  They know that a happy ex-customer is better that a pissed off ex-customer.

Misuse the Phone – This may take a little tech expertise.  Tether your phone.  Tethering is where you connect your cell phone to your laptop and use it as your wireless internet connection.  This abuses their allotted bandwidth (Only use this if you have unlimited broadband.)  I have had friends have their plans cancelled within a month after leaving their phones hooked up all day(peak times) to download music or movies.

Persistence -  If you just spend enough time with enough customer service reps they will eventually let you got.  This one is dangerous.  I had a roommate who spent a total of 34 hours over the course of 5 days talking to customer service reps.  They eventually figure that you are going to cost them more money in time than it is worth.  However count your time, is it really worth it just to avoid a couple hundred bucks?  My roommate did this as practice for his negotiating skills.  Talk about a long skills workout 34 hours.

Take a look at all of these strategies and decide which best fits your situation and abilities.  Negotiation is a skill and takes practice and preparation to be good.  Anyone can become a good negotiator.  Everyone negotiates everyday, whenever two people come to a mutual agreement there is some level of negotiation.  Even if it is just where to go to the movies on Friday negotiating is an important process in our lives.  For more information about negotiation strategies and help with preparation check out the Negotiation Forum.  A free place to learn, share, and succeed with negotiations.