If I followed a cell phone contract exactly, can a collection agency still try to collect an early termination fee?

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If I followed a cell phone contract exactly, can a collection agency still try to collect an early termination fee?

Recently I was faced with having to pay an early termination fee of $200 after not being able to pay my bill; however, in my contract it states that if I exchange or return my phone within 30 days of my original activation day I do not have to agree to have the service on for 121 consecutive days. I exchanged the phone-or upgraded (not sure of T-Mobile’s terminology) 14 days after I activated my account.

Asked on July 18, 2011 under Bankruptcy Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

A contract is enforceable against both parties, so IF your  contract allows you to terminate early without a fee or penalty under some conditions or circumstances, and those are the conditions or circumstances which apply, then should not have to pay the early termination fee. The things to consider are:

1) Are you reading and understanding the clause correctly? It may not mean precisely what you think it does. You might ask the phone company directly about this--ask their CS rep, for example, why you can't terminate early given the language that you are referring to, or asking them for their understanding of it.

2) Is there some other clause or language in the contract limiting your early termination rights or putting additional restrictions on it? You should reread the whole contract, including all the "fine print," carefully.

3) If the phone company is going to insist on this money, is it worthwhile fighting it--potentially incurring court or legal costs, possibly having a default reported on your credit, etc.?


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