Contracts are a standard part of doing business, one that obligates both parties to the stated terms. As customers know all too well, trying to end the relationship before the expiration date usually incurs a penalty, typically called an "early termination fee" (ETF). Adding insult to injury, some companies make it very difficult to cancel a contract.
Here's a short guide to the cancellation policies adopted by mobile phone companies, gyms, and credit-reporting agencies.
Mobile Phone Companies.
AT&T:
The early termination fee for smartphones starts at $325 and drops by $10 for each month of service completed. For feature phones, the initial ETF is $150 and falls by $4 a month.
T-Mobile:
The carrier's newest plans come with no contract and therefore no ETF, but customers are on the hook for the remaining cost of any (unsubsidized) phones they haven't already paid off. For customers with older T-Mobile plans, the ETF is $200 with more than 180 days remaining on the contract; $100 with 91-180 days left; and $50 when 30-90 days are left. With less than 30 days to go, the penalty is $50 or your monthly payment, whichever is lower.
Sprint:
Sprint sets an ETF of $350 for smartphone plans with 23-18 months remaining and $340 with 17 months left; the $340 fee is cut by $20 each month with 16 to six months outstanding; starting with five months to go, the ETF is a flat $100. Feature phone users are assessed $200 for plans with 23-20 months left, and then catch a $10 break for each month less than 20 up until month five, when the ETF flatlines at $50.
Verizon:
The ETF policy at Verizon starts at $350, minus $10 for each completed month of service for smartphones. For feature phones, the contract cancel fee is $175 minus $5 for each completed month of service.
Helpful Hints.
T-Mobile recently announced it would credit new customers for any ETFs they incur upon switching (for up to five lines). Mobile phone contracts often state that subscribers may have grounds to cancel without incurring an ETF when a new non-governmental charge is imposed. (Tip: Scrutinize your bill monthly.) While difficult to pull off, it's worth telling a customer representative that you are considering canceling your contract. The response might be to offer incentives or discounts to keep you on the rolls.
Various websites and carrier-specific blogs such as SprintUsers, Lifehacker, and TmoNews (T-Mobile blog) are useful to check before trying to cancel your mobile phone contract. They often provide timely notice when a policy change can be used to your advantage.
Gym Memberships.
Many gyms have transitioned to month-to-month membership plans, with fees on the order of $30-$40 (and up, depending on the facility and the privileges) that are charged automatically to your credit card. Even these arrangements can be a bear to cancel, and charges continue to accrue until you complete the cancellation process.
Bally's Total Fitness:
Without an online option to cancel a membership, clients must call the company's member support team for specific instructions, as the process depends on the type of membership you have and where you live.
LA Fitness:
The cancellation process at LA Fitness requires sending a letter postmarked at least five business days before the next billing cycle begins to avoid another month's charge. Alternatively, members can hand a copy of the letter to the operations manager of the local gym. (Is the manager present when you work out?)
My Sports Club:
This gym offers both long-term and month-to-month memberships; both require a minimum 30-days' notice to cancel (and only after a minimum period with long-term deals). Long-term memberships can be cancelled before the minimum period ends only for "qualified medical reasons" or relocation beyond a "minimum distance" from a My Sports Club location (allowable distances vary by state). Members who want out must provide paper notification, handed in at a club or sent by certified mail to the member services department; cancellation rules vary by state, as do ETFs.
Helpful Hints.
It's a good idea to avoid signing a long-term gym contract, and with the trend towards month-to-month memberships, this is easy to do. To avoid the hassles involved in cancelling a contract when what you really want is a short-term hiatus, freeze your membership and pay a minimal amount, usually $5-$15 a month, in the meantime. While this might seem wasteful, you end up saving because the cost of re-enrolling can run upwards of $100.
Credit Report Companies.
Credit report companies provide your credit score, a number that affects whether you'll qualify for a credit card or loan, and sometimes the interest rate you'll pay. The higher your credit score, the greater the chances of getting credit and the more advantageous the terms. You can get free credit reports through short trial subscriptions, but charges on the order of $20 a month accumulate quickly unless the service is cancelled. The challenge consumers face is reaching a customer rep to opt out.
Equifax:
Users report that it is very difficult to find a cancellation method/policy on Equifax's website. We found that searching on "Equifax cancel" was the best strategy. Placing a call is the only way to cancel a subscription, trial or otherwise.
Get Human lists a phone number (different from Equifax's listed number) that the site claims has an average wait time of five minutes. We tried calling and a representative came on the phone almost immediately.
Experian:
There is no cancellation policy that we could find on the website and an online search for "Experian cancellation" turned up no relevant results. CancelWizard recommends the toll-free 1-888-829-6560 number (not listed on Experian's contacts page). We tried this number and a few short promotional recordings preceded a quick hold before a customer service rep came on the line.
Helpful Hints.
When it comes to signing on with these companies, our advice is simple: Don't. Federal law mandates that the three major credit-reporting agencies (Experian, Equifax, Transunion) offer free annual credit reports to individuals. This means you can receive three free credit reports a year (one from each company), which should be sufficient. The jointly operated website where free credit reports are available is AnnualCreditReport.
Resources.
CancelWizard offers free "how-to-cancel guides" that include contact information and steps required to cancel a contract. The guides note many common difficulties when trying to cancel a subscription and rates websites as "abusive" if company practices or cancellation methods lead to numerous reviewer complaints. A fee of $34.95 entitles you to use CancelWizard's direct cancellation service, with the charge applied only if successful. We found just one review (positive) for this service, but you can turn to the how-to guides for free.
Cancel-Help is similar to CancelWizard but does not offer cancellation services. Rather, this site provides detailed information -- comparable to, or better than, CancelWizard -- on how to cancel a specific service. Some information seems to be repurposed or imported from company sites, but at least you're reading information directly from the organization you'd like to part ways with.