Sep. 29, 2011 at 6:10 AM ET
Getting out of cell phone jail is among the more vexing problems for electronics consumers. In most cases, a new handset means a new two-year commitment -- and that, in turn, can mean missing out on the latest gadget, like the new iPhone, or putting up with inferior service while riding out a contract.
For years, however, savvy users have known about the occasional “get out of jail free” card that sometimes appears like manna from gadget Heaven -- the "material change in contract.” If a cell service provider changes the terms of the two-year agreement, consumers have the right to escape their contracts and achieve cell phone free agency. Each time a firm has made such a change -- such as when Sprint raised its administrative fee to 99 cents per line in 2008 -- users have leapt at the chance to jump ship without a dreaded early-termination fee (ETF).
But Sprint has wised up in this cat-and-mouse game, much to the chagrin of users who'd like out of their contracts with the firm right now. The resulting dispute has consumers crying foul, and accusing Sprint of doctoring contracts to hold on to customers against their will.
On Sept. 9, Sprint once again raised its administrative fee, this time from 99 cents to $1.50. Frustrated customers rejoiced, assuming this change would liberate them from their contracts. Strategies were plotted on websites devoted to escaping from cell contracts, and some consumers who called immediately after the notification was sent in August reported receiving early- termination fee waivers.
Then, Sprint put its foot down. The contract change is not material, operators are now telling consumers -- you are stuck with us.
Cliff Veazy said he called Sprint when the change was announced and was initially told he'd be let out of his contract after the change took effect on Sept. 9. But when he called Sept. 12, he heard a very different tune.
"This time I was told that the admin fee increase was not a materially adverse change and I couldn’t terminate ETF-free," he said. "It is very frustrating. ...They are fleecing the consumers, and, in my opinion, breaking the law, because they can get away with it. All they have to do is say no and hold out for more than 30 days, then it is too late."
Sprint officials confirm the changes, but maintain that they've given themselves their own contractual get out of jail free card.
Sprint's subscriber agreement includes language that says Sprint may charge "up to $1.99" for an administrative fee, said company spokesperson Roni Singleton.
"While it was previously set at 99 (cents), the new charge of $1.50 is still well under the $1.99 agreed to by the customer," she said.
Some Sprint customers dispute this, and claim the "up to" contractual language was added only recently.
"Sprint quietly added the clause about the administration fee being up to $1.99 sometime within the past few days," said customer Charles Koshy. "I guess they figured that if they were going to tell people that it was in the contract, they should make it more believable by actually putting it in there."
Several websites chronicle a change on Sprint’s website listing terms and conditions that occurred recently. A screen grab taken Sept. 14 doesn't include the "up to" language, but another, taken Sept. 19, does.
Singleton confirmed that the firm's website was altered, but said the critical "up to" language had been included in Sprint's "subscriber agreement" dating back to 2009 -- right after Sprint was burned by its last fee hike. She said it has also been included at various stages during online orders, displayed on "order review pages," and on confirmation receipts. The website change was cosmetic, she argued.
"Sprint added the Administrative Language to the opening paragraphs before the Terms and Conditions web page as a convenience to customers seeking information on Sprint.com and to include this information in yet one more location on Sprint’s website," she said.
The 51-cent monthly fee increase is not the only change Sprint customers are complaining about. The firm also changed language in its arbitration agreement to stipulate that consumer disputes must now be arbitrated using California-based JAMS alternative dispute resolution service.
Callers who say that's a material change in contract terms are also being rebuffed by Sprint operators.
For good measure, Sprint also recently enacted a new fee --- It's now $350 for "advanced devices" like smart phones, up from $200.
Meanwhile, Kochy says some consumers who claim they were initially told they'd be freed from their contracts are now discovering early- termination fees included in their last bills.
"More and more customers are reporting that Sprint is still refusing to let people out of their contracts. Some reps even have the nerve to tell people to go ahead and call an attorney and sue them," he said.
It all has users like Kochy feeling like they're being mistreated.
"Sprint is taking a huge gamble, hoping that people will just give up. We know that if customers just give up and let them do it, though, they'll keep doing shady business like this in the future," he said.