Why Are People So Outraged At Contracts?
While going through my RSS reader, I came across this article on the Washington Post about some guy in Chicago that was so "outraged" over the fact that he was still in contract with Verizon, he faked his own death. Now, other than the fact that, last time I checked, it’s ILLEGAL to fake your own death, I’m incredibly disturbed at the news stories that we hear about people being "outraged" that they have to pay an ETF to their carrier.
First and foremost, this is a HUGE downfall of the American public. I sold cellphones in Sam’s Club for over a year and interacted with people from all different walks of life, and they were all the same: If you want my business, you have to give me something for free. It’s like we’re programmed with this from birth, and that once they’ve gotten something for free, the company STILL owes them something.
I get REALLY fired up when people try to snake their way out of their
cellphone contracts. Why? Because it’s immoral, in my opinion. It’s
like those awful radio commercials that say, "We can eliminate your
debt, call Debt Consolidation of America (or whatever) and we will work
with the credit companies so that you only pay pennies on the dollar!
You must have at least TEN THOUSAND DOLLARS of debt to qualify."
Seriously? So what’s ol’ Billy Bob to do, he’s only got 8k in debt.
Sounds like he’d better get himself a new TV to crack that 10k limit,
and then only pay back "pennies on the dollar."
I really really wish the mainstream media would quit conveying the
message that cellphone contracts are bad and that people have the right
and justification to use any means necessary to avoid the Early
Termination Fee. It just encourages Americans to not care about their
financial reputation.
Now, I realize that the cell companies partially brought it on
themselves. Their ridiculously-worded contracts (have you ever actually
READ the thing?) free them of pretty much everything, and they’ve
conditioned consumers to expect a free phone, and the only way to
guarantee the revenue to cover that phone is with a contract. This is
why, for years, I’ve been saying that handset subsidies need to GO
AWAY.
If carriers would offer customers the option of buying their phone at
full-retail and getting a monthly discount for the contract. So you can
get the phone for free and pay $40/mo, or you could pay $150 for the
phone and pay $30/mo for the same minute plan. The monthly discount
expires when your contract does. At the end of the contract, you can go
month-to-month at full price, or sign another contract to re-activate
the discount.
Introducing this option now would allow customers to gradually move
over. This way, customers realize the purpose of the contract - to get
a cheaper monthly bill. It reduces the carrier’s cost of providing the
handset (most of the US carriers maintain that they lose money on the
handset).
There’s my rant. Personally? I think the carriers should take each one
of these bums trying to snake out of an ETF to small claims court.
Seriously. However, on the same note, perhaps the carriers should be
taking steps to make it less undesirable to be in a contract in the
first place.
If carriers would offer customers the option of buying their phone at full-retail and getting a monthly discount for the contract. So you can get the phone for free and pay $40/mo, or you could pay $150 for the phone and pay $30/mo for the same minute plan. The monthly discount expires when your contract does. At the end of the contract, you can go month-to-month at full price, or sign another contract to re-activate the discount.
That is probably the best idea that I’ve heard in a long while on this subject. I’m in agreement with you; wonder who I can call and shoot this too?
That will not work because operators sell devices locked to their network. That is the problem, not the contract.
When Billy Bob’s contract runs out and he decides that he can go with operator X for a cheaper rate than operator Y he will be faced with the reality that his GSM device will not work on any other network.
Please stop posting such amertuerish crap, if you wanted to be taken a little seriously. I have been a very regular follower of your site. Back on topic let me explain you a few things:
1) Every carrier in the US uses its own bands - unlike in Euro/Asia
2) More over every carrier marked phone is locked down to the software.
3) Show me a non-contracted phone for verizon or sprint that i can buy from NOkia, samsung or any other manufacturer … you simply cannot
4) Contracts just donot extend because you got a new phone. THey just extend when you want to move to a higher rate plan, add a new featur or just about any thing; SO you start off with 2 years and you are in it probably for life
5) Contract discounts exist in all other nations UK, India etc. But they are more reasonalble.
6) As some one mentioned above, the phones are worthless if you want to move out of the carrier.
THe more you dole out such nonsense … more you look like an idiot. Just trying to be non-conformalist does not entitle you intelligence.
Budugu:
1. This is my blog, and I can write whatever I want on it, rant or not. If you don’t like it, don’t read.
2. Wrong, all of the GSM companies in the US use GSM 850/1900, and all of the CDMA carriers use the same bands. Just not the same bands as the rest of the world, which isn’t the carrier’s fault, it’s the FCC’s.
3. The carriers wouldn’t have to mark down the phones if your contract was tied to your service instead of your phone.
4. My contract has never extended for anything other than to get a discount on a phone. Anyone who signs a new contract because they want more minutes is ignorant (note the word ignorant instead of stupid).
Ultimately, if you train people to pay full price for their phones through the carrier (instead taking the discount on the monthly plan) then you open up the market for the handset manufacturers to sell their handsets directly to the customer, unlocked and unbranded, and thus they’re able to move from carrier to carrier with ease (with the exception of CDMA, which is only closed because of the carriers’ greed, since they’re the ones that opted out of using R-UIMs)
That’s my point. The other point that everyone in the world seems to have missed is that this guy broke the law (faking his own death) in order to say himself a measly $175, and I haven’t read a single story where he was arrested for it. I also think it’s pathetic the way that consumers go to the extreme just to get out of a legal contract that they voluntarily signed. No one seems to realize the lack of personal integrity in the situation.
Budugu:
Please stop posting so much B.S.
1st) Get your facts straight before you start spouting off. The U.S. bands are unified, even if they aren’t unified with the rest of the world (as Ricky said). Moreover, of course the carrier phones are locked down, they essentially paid for them. Now, I hate locked phones, but really in the end who am I to bitch? Do I think that locked phones are a bad business move? Yes, but it’s their business, they can do what they want. I’m so sick of people going from a personal opinion “locked phones suck” to trying to legislate “no more locked phones!”. Grow up, the world doesn’t revolve around you, and just because you personally don’t like something doesn’t mean you have the right to change it for everyone else.
2nd) Please define “non-conformalist” for me, I’d love that.
3rd) What’s your point here? You call Ricky out for posting what you call “amertuerish crap”, yet you fail to address his primary point — that being that people agreed to contracts when they purchased their phones, and need to quit bitching about it just because they aren’t happy.
If you don’t like being on a contract then don’t be. There are other options for cellular service out there, prepaid, month to month options (Cingular has one, FYI), etc.
The American public has been so freakin’ brainwashed by a government that subsidizes them at every turn (farm subsidies, welfare, food stamps, etc), that they no longer feel a need for personal responsiblity. We are the wealthiest nation in the world, and yet the cheapest bastards on Earth at every turn. The most asinine phrase that I hear uttered almost daily is “It’s my right!”. Sorry, but just because you WANT to do something doesn’t make it your RIGHT.
Here’s a thought for you: go buy a prepaid gsm sim, buy the phone you want, and shut up. No contracts, no hassles.
-olly
I have one word for you all: Carterfone. Go look it up. It serves us well on the landline side. It would be wonderful if we could get those same principles applied to mobile phones as well.
Of course, the current FCC is so in the pocket of the telecoms that it makes me sick. They would never approve these rules. Maybe with the next administration, we’ll get some FCC commissioners with intestinal fortitude.
Olly, rich people are generally cheap by definition. How do you think they got rich?
I would like to see a follow-up rant …err post after Google acquires the 700MHz frequency. Visions of a bright yellow “device” that lets make make free unlimited calls, surf the net, watch TV and listen to my MP3 that are on my home PC’s hard drive have been dancing in my head.
If Google was your carrier, you’d never sign a ETF.
References:
http://www.openmoko.org
http://www.fon.com/en/
While i give it to you that it is your blog and you can rant… i think you just played into it but defending yourself using “it is my hole” argument. Leaving it aside…
Any plan on the websites (postpaid) in US is termed as a promotional plan… i.e. involves 2 years of contract (exc. tmobile - even they have a mandatory 1 yr, and 2 years for my fav). All those plans with nights ans weekends are for 2year contracts only … and i am not talking of getting a new phone even. Go check it up. So if you move from 600 min plan to 1000 min with nights and weekends … it is considered moving to a new plan and you contract resets (atleast with tmobile and verizon … with verizon that was the way it was couple of years ago). So your point that contracts dont extend if you donot get a new phone is flawed.
Ricky, show me a prepaid plan with data? or blackberry service? if you cannot i think your long essay has little to no meaning … prepaid mins are so expensive … when compared to the rest of the world. So what i am saying is not that people are resposible for what they sign … it is that people are being unfairly forced into what they are not interested in, just because it is good business. I can give you lots of examples like in UK/India where it is not the case.
The fact that some one tried to fake his own death, is sad state of affairs (and midly funny)… but that does not warrant a generalization on to the whole american consumer as a whole. No one is arguing that he is justified or it is lawful. But any one who had to deal with these carriers will agree that you can sympathize with this guy. ( i paid verizon 300 bucks to get me out of a contract just because they cannot get their billing system straight .. and used to send me 600-700$ phone bill every month.- i used to spend 4-5 days getting it corrected and in 7 months i was fed up).
And by your own admission, your argument at the most works for cingular and tmobile in the US (that is less than 30% of the subscribers?)
The problem with non-contract plans is not that they are expensive it is that they are not willing to give features at any price (to force into a contract).
And your debt consolidation thing … it is a business. Who gave this guy 8K to begin with, esp with default interest rates? or the whole subprime drama that is getting enacted now? Structured finance itself dwarfs any other kinds of derivatives, which inturn are few times the worlds GDP. So if you are expecting “morality” from the consumer … how come you are ok with carier greed (or the banks who sold these loans)? Some how from your sams club experience, you only saw consumer greed! And about the guy … i am sure if and when verizon presses charges (which am darn sure they will), law will take its own course. You dont have to be a carier/banking industry evangalist / vigilante!
I agree. The carriers (well, the government, more specifically) have brainwashed American cell phone consumers to expect free handsets to the point that the vast majority refuse to pay anything less than $50 for a new phone.
The side affect of this is that this means no company is willing to market high-end or ultra high-end handsets (such as the N-Series or the K850 etc) because people don’t want to spend money on a phone.
The iPhone is slowly disproving that, granted. But if the subsidizing went away, better phones would eventually make it to this side of the pond.
There would also be increased market for unlocked phones. I’d love to be able to go to the mall to get an unlocked phone as opposed to importing them all.
Kevin, the iPhone only partially disproves that Americans won’t pay full price for phones. AT&T pays Apple a $200 “finders fee,” which to me means the iPhone is really an $800 phone (not a $600 phone), plus they share 10% of the revenue. Even worse, it’s so locked down it might as well be a CDMA phone, and is a huge step backward for GSM (no one’s figured out how to unlock it yet). My concern is that Nokia, Sony Ericsson, Samsung and others will start locking down their high-end phones.
I don’t mind contracts, provided they are transparent and the carriers don’t use insidious ways of getting people to extend (like treating any fee waiver or customer retention bonus as an extension). I also think it’s a bit disingenuous to require a 2 year contract to change between basic plans. Even the cable and landline companies don’t require new contracts to change feature packs.
To be fair, T-Mobile does have a fair number of “non-promo” plans that don’t require customers like me who are out of contract to extend. I’ve switched back and forth between $30 and $40 voice plans over the past few months and am still on month-to-month, which I like. I resisted the temptation to buy a promo plan, and to T-Mo’s credit, they make it clear on their website before you hit “submit” if the plan will extend your contract. I’ve heard other carriers are a little less transparent. Even so, I still pay the same monthly fee for my service as someone who gets a “free” phone every two years, even though I haven’t bought a phone from T-Mobile for more than 6 years now.
I’d like the idea of accepting a slightly lower monthly rate in exchange for no phone subsidy, and I also like the idea of more people buying unlocked phones. It isn’t as if I buy my television from Comcast. I get my TV from whomever and then subscribe to the cable or satellite company. Why should mobile phones be any different?
I dont think that you will have to worry about the nordic companies (Nokia and Sony Ericsson). It may be because of our culture, but alot of my friends would never ever buy a locked down phone. Ppl just want to go out and buy a new mobile, put in their sim card and be done with it.
The mobile phone we know today was invented 1884 by Ericsson, so I don’t really see why that company would change it’s business strategy just because it’s starting to get popular in USA.
If Ericsson moved to USA then we start to talk about locked down phones.
You guys have WAY TOO much time on your hand to write all that junk about contracts. Get a job! There is nothing you can do about it anyway! I see no problem with contracts at all. I got a free cell phone, singed a contract, i use the phone, and they give me good service. Two years later i need a new phone, i get another free on, i use it, and they give me good service. What the hec is wrong with that? By the way, for all those people that screw the credit card companies with their immorality that you don;t mind, you pay for it in interest rates and taxes. DUH!
Now that I have read quite a bit about contracts in the US and elsewhere, I would like anyone that is interested to check out this link and provide any comments if you so desire.
http://xmangerm.vox.com/library/post/my-kick-ass-network-provider-discounter-costs-are-second-to-none.html#comments
Now that I have read quite a bit about contracts in the US and elsewhere, I would like anyone that is interested to check out this link and provide any comments if you so desire.
http://xmangerm.vox.com/library/post/my-kick-ass-network-provider-discounter-costs-are-second-to-none.html#comments
Love the fact that Budugu got what he deserved from Olly and Ricky. Thank goodness! Can I say it is so good to see Olly back! Where have you been? I missed you. Now my personal thoughts. I love the post and agree to disagree. Contracts are everywhere but why should we have to sign one. In fact, if I had a choice I wouldn’t. Yet, I canceled my contract with Sprint early and they wanted a 300 dollar early termination fee. Hello sprint, if you idiots at the company would have stopped changing my billing every month maybe I would have stayed with you. And if your annoying sales people would have not called me to congratulate me on 5 yrs with you over and over, I wouldn’t have gotten annoyed. Who cares if I have been with you 5 or 10 years. Unless I call you, leave me alone! So the guy didn’t want to pay the early termination fee! I don’t blame him. It is a big ripoff from my point of view but I can see why they do it. I think no contracts would make a lot of people happy. However, things don’t always work that way. However, no one should fake their own death to not pay. Just don’t pay the bill if you don’t want to. Not realistic for most people and I don’t agree with it, but a little more respectful then faking your own death. As for the guy who faked his own death, he should go to jail. Last I checked it is a crime to fake your own death and if he gets away with it what are we teaching the public. Fake your own death when you want out of something? In a court of law they will go back to this case and probably get away with it because this guy did. Just Sad…
Wuh, didn’t know one could have so much problems with SIM-lock.
Here in Germany it is quite simple: If you got your phone bundled with a contract it is not locked at all. If you got it with a prepaid-card it is locked for two years. Or you can unlock it early by paying a fee (I think around 50€).
Of course you could also directly buy an unlocked phone and use it with whatever SIM you want to.
Having a contracted phone locked? What is that good for, you won’t sign two different contracts with the same carrier anyway. If there is a reason for you to use an other SIM (like using it in different countries) that surely won’t be changed by locking the handset.
If what you’re trying to say overall is that Americans are cheap, you’re not going to get an argument out of me. At the very least, I think it’s worth it to wheel and deal with carriers at least a little bit about your terms so you don’t get completely raped on activation fees and markup on accessories.
In a futile attempt to switch to AT&T for the new 3G N95, I’m going to see if they’ll let me sign up for a contract plan without a contract since I won’t be buying a phone from them at all. If they let me do that, I have no problem buying accessories, paying activation fees, or even tipping the guy who hooks it up for me.