When people (like me) switch cell phone carriers we tend to find out about billing cycles. In our case, we began to find out about them when we received a bill for a cancellation fee. As I described earlier, when I phoned AT&T I was told that my former carrier priced the phones at $325 each, that each month we are with AT&T we “pay off” a portion of that price and, since we left early, we got charged for the amount we had not yet paid off.
This did not make sense for a variety of reasons; basic math being one of them. 325 divided by 24 equals 13.54. Meaning that, if this story was accurate, we pay off approximately $13.54 per month and that the termination fee should have been, at most, $28 for two phones. So I decided to file a complaint with every regulatory agency that oversees cell phone carriers—and there are a number of them:
That’s a lot of regulators but conveniently you can file each and every single one of your complaints online. So I did. Then I wrote out the check for the amount AT&T demanded, mailed it and went on with my life. To be honest, I didn’t think anything would come of it.
But it did. On Wednesday, my e-mail and phone lit up with calls from the office of the president at AT&T. The representative who spoke to me waived the fees and explained why they were assessed in the first place.
It turns out that there are two dates you need to keep in mind when you switch carriers if you have a two-year contract and bought your smart phone from your carrier:
- Your billing date: that is the date through which you are provided telephone service by your carrier—internet access, voice access, etc.) and
- Your cycle date: that is the date through which you promised to stay with your carrier.
Crucially, these two dates are not the same. And if you leave your carrier before your cycle date you can be assessed a penalty or an early termination fee. Of course if you leave your carrier after your billing cycle starts, you can be assessed for the service you are using.
To avoid both charges, you need to switch carriers in the last month of your contract in (typically 3-8 days) overlap between the date your billing date ends and your next cycle date begins. In our case, that would have meant switching carriers between midnight June 25 and midnight July 3.
So now we know. Though I have to say, this was not a fun lesson to learn and I hope this blog post will help you avoid our mistakes.
Although, as I had said earlier, the best way to avoid those fees is to buy your own phone and not enter into a contract in the first place.