2. Figure out the cancellation fee

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I want to cancel my cellphone contract. What should I know?
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2. Figure out the cancellation fee

Whether you have to pay a cancellation fee depends on if you have a "fixed-term contract". It also depends on whether you got a discounted phone with your contract.

Fixed-term contracts

A fixed-term contract means a contract with a set end date.  If you have a fixed-term contract, your service provider cannot charge a cancellation fee after 2 years.

If you received a discounted phone, your cancellation fee can never be more than the amount of the discount. For example, if the retail value of your phone was $900, and you only paid $200, the discount is $700. You would have to pay $700 to cancel your contract.

If you did not receive a discounted phone, then the cancellation fee will be the lesser of:

  • $50, or
  • 10% of the price for services for the time remaining on your contract

For example, if you have a 36-month contract for $100 a month and you cancel after 20 months, you can be charged 10% of $400 (4 months x $100 a month), or $40. 

No fixed-term contract

If your contract does not have a set end-date, then your service provider can only charge a cancellation fee if they gave you a discounted phone. The cancellation fee cannot be more than the discount. The fee must be reduced every month, and must reach $0 after two years.

No cancellation fees

In some situations, your service provider cannot charge you a cancellation fee.

If you don't get a contract

You can cancel your contract within 30 days of receiving it if you have a fixed-term contract and your service provider doesn't give you a copy of the contract within the required time. You can also cancel if the terms of the contract are not what you agreed to. You cannot be charged a cancellation fee.

Trial periods

If you sign a contract for cellphone services with a cancellation fee, the contract must include a minimum 15-day trial period to test the phone. The trial period starts on the day you first get service to your cellphone.

During this time, you can cancel the contract at no cost and the service provider can't charge any extra fees if you:  

  • use less than half of the limit for voice, text, and data set in your contract
  • return any free or discounted phones or accessories to the service provider in near-new condition, including the original packaging

If you have a disability

If you have a disability, you have the right to a 30-day trial period to test the phone. During that time, you can use up to the limit for voice, text, and data set in your contract. 

Reviewed: September 15, 2020

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