Verizon has quietly changed its ETF policy with the growth of its EDGE early upgrade program and the decline of the 2-year agreement forcing the carrier to make adjustments in order to recover the value of increasingly expensive smart devices. It is also likely that the changes are also aimed at the ETF payment promotions offered by rival carriers such as T-Mobile and Sprint to lure new customers.
As of today and affecting new customers that sign a 2 year agreement or those that renew and agreement after today, Verizon is delaying the monthly ETF discount and proration for customers under an agreement until after eight months of service. Under the new terms, customers who choose to leave before 8 months into the agreement period will now pay the standard $350 ETF and ETFs will now be prorated and discounted by $10 per month starting during the 8-18th months of the agreement. At months 19–23, the ETF discount increases to $20 per month and goes up to $60 in the last month of a two year contract.
Under the former ETF policy, all customers who purchased a smartphone under a 2 year agreement were subject to an ETF of $350. The fee was then prorated and decreased by $10 each month beginning after the first month of the agreement. Customers who chose to pay the ETF after six months under the old policy would have been be required to pay an ETF of $290, taking into account the monthly reduction totaling $60, instead of $350. Below, the full text of the new ETF policy:
If you cancel a line of Service, or if we cancel it for good cause, during its contract term, you’ll have to pay an early termination fee. If your contract term results from your purchase of an advanced device on or after November 14, 2014, your early termination fee will be $350, which will decline by: $10 per month in months 8–18, $20 per month in months 19–23, and $60 in the final month of your contract term. For other contract terms entered into on or after November 14, 2014, your early termination fee will be $175, which will decline by: $5 per month in months 8–18, $10 per month in months 19–23, and $30 in the final month of your contract term. If your contract results from your purchase of an advanced device prior to November 14, 2014, your early termination fee will be $350 minus $10 for each full month of your contract term that you complete. For other contract terms entered into prior to November 14, 2014, your early termination fee will be $175 minus $5 for each full month of your contract term that you complete.
