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Verizon Thinks You are a Fool for Not Wanting a 2-Year Contract, Because You are Saying “No” to Discounted Phones

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Calling a 2-year service agreement with a wireless carrier in the US a “scam” is probably putting it too lightly. There are few deals in any industry as bad as the “deal” you get when you lock yourself into a contract for wireless service. Don’t tell that to the person in charge of Verizon’s official Facebook account, though, as they seem to think you are a fool for not wanting to sign a contract. Why? Because you are saying “no to discounted phones. Period.” 

Carriers will sell you on things like discounted phones at prices as low as a penny to get you to commit, because if you bought that same phone without a contract, you would pay upwards of $600. The problem is, they may be allowing you to walk away with a new phone for next to nothing, but you are still paying for that phone each month with a built-in, behind-the-scenes subsidy cost (think of it as a really bad loan). So each month, you are paying for that phone with a charge that won’t show up on your bill or ever receive a mention from your carrier of choice. By the end of your service agreement, you will have paid for that phone little-by-little, month-by-month, you just might not have realized it (ever wonder why your ETF lowers after each month?). The problem is, that once your service agreement is over and that phone has been paid off, your carrier won’t cut the subsidy cost out of your wireless bill, so you continue to pay for that phone over and over again. See a problem there?

We have preached for years now that you are better off never signing another contract or buying a phone on subsidy with a carrier, but we also understand that not everyone can pay the full price for phones upfront and that you were still getting screwed by these hidden costs anyway. Thankfully, carriers like T-Mobile have attempted to do their best to change the way this all works. For example, T-Mobile has separated phone payments from service payments, so you now pay for your phone via monthly payment plan that can eventually end once the phone has been paid off. You don’t have a built-in subsidy cost that never goes away. In other words, once your phone is paid off, that cost to you is gone and you are left paying for just your wireless service.

This is the way it should have always worked. But again, that subsidy cost has been hidden forever, deep within contracts and is only recently being pulled apart as the scam that it is. AT&T and Verizon have followed suit somewhat in this area by offering up monthly device payment plans like AT&T Next and Verizon Edge. They give you per line discounts if you sign-up for these monthly plans, which is basically their way of pulling out that cost. Now, they are still locking you in to monthly payment plans and keeping you with them, but you won’t be double charged for a phone like you are with a standard contract.

The entire industry is moving away from 2-year contracts, because they are nothing but terrible. As PCMag noted in an article earlier this year, even carriers would love to get out of the subsidy game.

Which brings me back to Verizon’s post to Facebook today, which reads “Saying no to long-term service contracts means saying no to discounted phones. Period.” I’m not sure I have read a more insensitive or out of touch line in a long, long time. Period.

Via:  Verizon (Facebook)
Cheers Brandon!
  • Barrett Jasper

    So, Im contract-Free Nov. 15th. Will I then Own my Note 3? What should I do with it? Should I upgrade to a note 4 perhaps and sell the Note 3 to pay for it (mostly) and get one another 2 year plan or should I stay with ATT without a plan and just use my Note 3 some more. Confused what to do….thanks all!!!

  • 1RealityCheck

    You need to look at your out of pocket costs over 2 years but never underestimate the stupidity of the American public. With a $350 unlocked

  • Lex

    How is T-Mobil having their customers pay for their phone monthly any different than AT&T’s Next or Verizon Wirless’s Edge? It’s the same thing! But you word it as T-Mobil being better. Hahahaha! You must be like VZW & think we’re dumb enough to let you pull the wool over our eyes.

    Granted, in the picture the representative should of been more sensitive in their response….but still, you article reads like hidden plug for the “pink” carrier. Truth is, all of them have their hidden fees & different spins on the monthly plans. Period.

  • You are so off base. AT&T NEXT, VZE EDGE, it wasn’t “just” T-Mobile US that did and does this. 90% of all postpaid activations are on NEXT now on AT&T.

  • Jeremy J

    Who ever wrote this article obviously has no clue what they are talking about. There’s NO SUBSIDY. The price for a plan is the same but if you sign up for a Edge plan they discount $10 a month. So let’s do the math here…. iPhone 5s is $199 2 year $75 contract. On Edge you pay $34.46 per month plus the $65 plan. That $199 phone for two years just became a $780 phone. Sure you pay $10 extra per month so $240+$199=$439. Even if you cap the edge plan at the FULL Retail cost of that iPhone 5S at $649, you are still paying $210 more than the guy on the two year contract.
    It’s simple math people.

  • Jeff Mayeux

    Well said Kellex! Would we buy a car the same way a cell phone? Heck no! As soon as the final agreed upon payment terms are up we stop paying for the car. What makes the subsidized cell phone model look so bad is the monthly payments continue until we sign a new contract or leave.

  • Stewart McCall

    It is amazing at how many people don’t look at the BIG picture. The last time I did a contract it was with Verizon and when I paid full price the phone and told them I didn’t want to renew the contract the cretins in the store ran it through as a contract renewal and I lost my unlimited data.

    It wasn’t that used the unlimited data but I didn’t want to lose it and instead I ended up paying full price for the phone, lost my unlimited data and got trapped into a contract that left me paying a hefty early termination fee when I got sick of the perpetual pestering for me to further add to my monthly cost with extra features that I wouldn’t use.

    I have worked out that over the course of two years, if I had paid the $299 (plus the tax on the $749 at 9%) then paid for all the features that I get on a T-Mobile fully unlimited plan I would have paid over the two years close to $1200 for the iPhone 5. That’s not a saving in my books.

    It’s one of those companies that really give you a good screwing and then sneak off without even giving a Thank you.

  • taron19119

    To every one I use 40 gigabytes of data a month on t-mobile unlimited plan so u can have the other guys

  • Steve

    This may sound crazy, but my recent switch from T-Mobile to Verizon is saving me money. Got a LG G3 and iPhone 5S (16gb), 3gb plan. Don’t give me this “wait, but there’s no contract if you buy your phone outright, and that’s a good thing” argument, since if you EIP your phone and stop the service, the entire phone payment becomes due. T-Mobile may not require you to enter a “contract for service”, but EIP is essentially a “contract tied to service”. I (and probably TONS of T-Mobile customers) can’t buy these phones outright, so I gotta pay monthly or pay a subsidized amount through another carrier. Here’s the comparison of the deal I got last week:

    LG G3 – $598.80 ($24.95/Month)
    Sim Card – $10
    iPhone 5S – $648 ($27/Month)
    Sim Card – $10
    Service (3gb) – $2400 ($100/Month)
    Total over 2 years: $3,666.80

    LG G3 – $99
    Activation – $35
    iPhone 5S – $99
    Activation – $35

    Service (3gb) – $3,360.00 ($140/Month)
    Total over 2 years: $3,628.00

    The big variable is the phone price – if the iPhone were $199 (like it is now, rather than $99 last week), it would change everything. However, at $99 for the iPhone, the price is very competitive between the two, and with Verizon I get better service (at least in my area). I’m all for “less contracts” in general, but I wouldn’t go so far as to say T-Mobile’s way is saving everyone money. If you buy your phones at a discount through a third-party, no question T-Mo is the better way. But if you’re on a plan with more than one phone and are unable to plunk down a substantial chunk of money at one time, and are instead tied to either subsidies or EIP, the EIP way may not always be the cheapest.

    • Maximus

      You did do a little bit better with VZW for 2 years, but they real savings comes after 2 years when your payment drops with TMO while it does not with VZW.

      • Steve

        You’re right about that, if I don’t upgrade. If I upgrade at the end of the two years, it repeats itself (in theory). At that point, I’d be able to sell the Verizon phones via Swappa or Craigslist (just like I’d be able to do with the T-Mo phones) and offset some upgrade costs. If I didn’t upgrade after two years, or took a few months after 2 years to upgrade (for whatever reason), I would be losing out.

      • John Kitchen

        Except it will drop with VZW..

  • Syrron

    So, not going to point out that Verizon also has the EDGE program… very obviously someone is a little biased towards T-Mobile with this article.

    The Facebook article is correct. If you want a $100 iPhone 5c, then you will sign a contract. Otherwise, you’re making monthly payments for that equipment – or buying it outright.

    Not understanding what is so freakin’ hard to understand about this.

    Carriers have to purchase the phones from manufacturers, and I promise you Apple is not charging them $100 for a 5c. Last I checked, NONE of these businesses involved were charities.

    People need to get over their sense of entitlement. No one owes you a damned thing.

  • Buddy
  • TrixzD

    Got something similar t mobile over here in the UK I use o2 and pay both my phone and tariff off separately so eg I pay 10 quid a month for my phone and 13 quid odd for tariff and if I want to upgrade I can at anytime by simply paying off the remainder owed on the phone and if I get to the end of the contract completely and don’t want to upgrade I keep the current phone but only pay for the tariff

  • drublin

    Nobody ever lay’s out instructions for how to end the contract and stay with the carrier. My two years is up what do I do now to get out from under VZW’s thumb but continue using their network?

    • Maximus

      You are out of contract now so you can do whatever you want. But if you upgrade your phone with VZW, you two year contract will start up again.

  • foghorn67

    Who in the hell are these 99 people that liked that post in the screen capture? What kind of sadistic and hateful breed would “like” that?

  • Brian from WA

    I just chatted with VZW through My Verizon. I inquired why I did not receive a monthly discount after both of my GNexus phones went month-to-month six months ago. They said my plan does not warrant a discount, just a release from the contract. I am on a plan titled “Nationwide Talk Share 700” for $50/month plus $9.99/line. I think the discount so many people keep saying you can get if you “just ask” is for people on newer plans like the More Everything. This has already been mentioned many posts up, I am just passing along my observations.

  • Dark_Laser

    Wait, that picture with the cellphone box trap was actually posted by Verizon? I really don’t think they actually thought about the message conveyed in that image.

  • mcdonsco

    I would happily buy a new subsidized phone and sign a new contract if Verizon would let me do it on my existing unlimited everything account.

  • BoFiS

    If they let me renew my contract WITHOUT changing my plan (from Unlimited) then I would have paid them hundreds of dollars and renewed my contract by now…but they are the ones being jerks about it…

  • MikeD675

    I’m getting ready to upgrade. Is EDGE worth it? I only upgrade every 2 years anyways.

    • GJV

      If you only upgrade every two years, it’s definitely not worth it. It’s even questionable if you upgrade more frequently.

      • MikeD675

        Yeah I realized that after reading some of the comments further down.

  • Travis Sorenson

    I love reading through the comments. The public doesn’t get it but when we are asked about phone prices, we all become John Nash from “A Beautiful Mind.”

  • dude

    It is pretty ignorant of the author to indicate that no one ever benefits from a service contract. If you had an 4gb plan or less you save $10 a month being out of contract with current promotions. You would have to pay full retail for a smartphone, say around 600 but save 240 so net 360. If you did the contract for a galaxy s5 right now it is 99 + a 30 upgrade fee. So end result is 130 on contract, or 360 without.

    This is only one example, if you were on the edge program and over 10gb it comes out to 100 after the discount. So some it is better and some it is not. But to say people are stupid if they consider a contract is just ignorant.

    • Dude, you’re a moron. Follow the rest of the sheep, just like Verizon wants you to.

      • dude

        I’m not saying it is always better but there are clearly times when it makes sense. You deny this? How is my math wrong?

        • Maximus

          It’s not just what you are paying for the phone. It’s what you are paying for service. VZW claims that their service is more expensive because they are subsidizing your phone. Then why don’t they reduce the service cost once your phone is paid off? That really is a scam…

  • MikeSaver


  • Disqus11111

    Essentially, if I want/need to stay with Verizon, it doesn’t make sense to not take a two-year deal because I am going to pay for it anyway.

    • Unless you’re on Unlimited and average over 40gb/month. Then it makes sense to just buy phones outright, or get them from swappa, etc.

  • Jamil

    Let’s hope Verizon has another glitch next year so that we can purchase a phone at promotional price and keep unlimited.

    • dragonflyr

      i hate to tell you .. but, “unlimited” data is on it’s last legs.

  • Victor Who

    Can someone please point out what the hidden charges from Verizon are? I swear…I have both a T-Mobile and Verizon and I can’t see it. LOL…I really can’t.

    Also Kellex’s title is misleading. Nowhere in that brief Facebook exchange do I see Verizon expressing thoughts that one is a FOOL if he or she does not want a discounted phone.

    Truthfully, I don’t know where this “hidden” charge is and I think the rest of America can’t find it as well. I have quickly glanced over the 240+ comments on this post and NO ONE has pointed out where this phantom charge is. Therefore I think there is NONE. The reason why Verizon always costs more is simple…they simply want to charge more. I don’t think there is any hidden cost whatsoever. Right now, they have the best product among the wireless carriers. It’s the most reliable and super fast. No one can tell me otherwise, because I also have a T-Mobile account (for my Nexus 5) and their service is reliable to an extent. This is why Verizon charges more for their service, because they know they have the best quality service. It’s not because of some hidden charge, it’s because Verizon feels they can.

    Kellex, please show us your bill or any VZW bill and point to us where this hidden charges are! Everybody in America has been told about these hidden charges, by T-Mobile and blog writers like Kellex, but no one has actually seen them. Ya know this, because people are still signing up for Verizon Wireless service despite John Legere and T-Mobile’s endless “Carrier-free” ad campaign.

    Again, can some one show me this hidden charge? Because if they can’t, then I’m just going to think that this is nothing but a simple cost markup, rather than some hidden charge.

    Also can we stop with these misleading Titles?

    • JRomeo

      for example, if a plan costs $85 per month with a 2-year contract (with free phone), the secret….. is that the plan really costs $55 per month + $25 monthly to payoff that free phone you received….. however, you never see that…. all you see is that your plan costs $80 per month…. after 2 years (of paying $25 each month, you’ve already paid-off that $600 phone), but they never tell you that part….. as far as you know… you just have an $80 monthly plan… period… even if you do not get another phone, you still continue to pay $55+$25=$80 per month… the $55 and the $25 are not reflected on the bill… all it says is $80 for the plan on the bill… there is no breakdown…

    • dragonflyr

      Victor … the subsidized phone should be paid off after, 18-24 months, right? So, one would expect their bill to go down a little (somehow, someway) once the phone is paid off, right? But, that never happens! You still continue to “pay” for the phone even after it is essentially paid off. That is the catch. You want to call it a “cost markup” .. fine. Whatever you want to call it, but you continue to “pay” for a phone you basically paid off. Basically, there is ALWAYS a catch with Verizon. It is ALL a “cost markup” nowadays .. and data (another story) is the sweet spot.

    • Jason Kahn

      Simple my $100 a month plan on Verizon costs only $60 on T-Mobile. Although after a review of how much I am saving I jumped to the full unlimited t mobile plan for $87 with tax. The money I save goes into the savings fund I’ll use to buy the nexus 6.

    • Aaron C

      “Ya know this, because people are still signing up for Verizon Wireless service despite John Legere and T-Mobile’s endless “Carrier-free” ad campaign.” <– because some people still don't really have a choice if they want good coverage. T-Mobile will eventually fix that, but it's going to take a while. Look at the churn and T-Mo adds and you'll get the picture. Most of T-Mobile's adds are coming from AT&T, which probably means people are sticking with Verizon because of the network, or their belief that the network is "premium."

    • Maximus

      It’s not that misleading. The way the FB post reads, if you say no to a discounted phone, your basically foolish. That is obviously short-sighted though because saying “yes” to a discounted phone means you are also saying yes to a two year contract and a high monthly bill.

  • Dylan

    It would be nice if somebody came up with a radio that could be updated to support different bands after the phone has been released. I though Qualcomm was advertising a chip like that a while back but I haven’t seen anybody actually “reprogramming” their radios. Interchangeable radios…another Project Ara nice to have.

    When people can freely switch networks at will without having to worry about whether their phone is CDMA of GSM or covers the right 4G band(s) being used in their area, paying full price for a phone with the idea that you can switch to a better priced service any time may be an easier sell for non-phone-nerds.

  • Angie

    as a former employee. I can tell you that vzw absolutely does not want 2
    yr contracts. Customers are pushing for it. they are the ones who are
    *appalled* at paying for the phone on a payment plan (edge) and keep
    asking for contract pricing. I took those calls. i tried to sell edge
    with plan discount. there are ppl who WANT the discount/cheap phone now.

  • What’s the alternate service-only option if one buys the phone at full price?

  • vtpmt81

    Verizon, Verizon, Verizon – you aren’t fooling anyone with this post. I pay $60 a month through ATT GoPhone for unlimited talk and text and 2.5 GB of data. I paid $350 for my Moto X 7 months ago.
    With phones like the Nexus 5, Nexus 4, One Plus One, LG Optimus G Pro, Moto X, Moto G, HTC One Mini, SGS 4 Mini, Blu Life Pure XL, Nokia 92x/63x52x, BlackBerry Z10/Z3/Q10, etc. all being available for less than $400 unlocked – why should I buy a phone and pay $80 a month on contract through Verizon (for 2 GB of data IF you qualify for EDGE)? Actually – try about $86 or so after taxes and other annoying fees. If you don’t use EDGE you will be paying $97 a month.
    So I should pay $37 more a month and be happy in a 2 year contract when AT&T’s service is just as good where I live? I can sell my unlocked very good condition Moto X for $200 at the end of the year and put that towards a nice new phone.
    I get that some people don’t want the hassle of buying a phone upfront and are happy with the coverage that Verizon provides. That is fine – if you are happy keep giving Verizon your money.

  • Rob

    This definitely makes me want to buy a premium phone if it goes on sale on a second line and turn around and disconnect the line and pay the ETF. Activation fee, sale price of phone, plus $350 ETF and prorated 1 day of service is less than $600.

    • Ian

      I like the idea and the carriers hate to see this happen. But unfortunately they are still getting paid, just not as much as they would if you stayed. The activation and ETF amount to a little profit for them. However if you can personally profit while allowing someone else to buy the phone and remain contract free then again I would say go for it.

      • Rob

        I confirmed you could do this and only pay for the activation, price of phone, ETF, and prorated service. Open a second line and then close it. Everyone should do this if they are on unlimited.

  • Pitahson

    For me, prepaid has definitely been cheaper than others. After a year of hard work, I’ve earned free service. Unlimited talk text and 4GB of data for free on T-Mobile or AT&T towers. I only pay for my smartphones now.

  • CasperTFG

    “The problem is, that once your service agreement is over and that phone has been paid off, your carrier won’t cut the subsidy cost out of your wireless bill, so you continue to pay for that phone over and over again.”

    Anybody with grandfathered unlimited have success calling Verizon to lower their bill to remove the subsidy cost after your contract was fulfilled?

  • Marshall P.

    This explains why during both of my calls to switch my recently completed 2 year contract to prepaid, was interrogated on why i’d want to switch to prepaid.

    VZW: “May I ask why you’re wanting to switch to prepaid?”
    ME: “Well my contract is over and i think i’ll start buying phones unlocked so that I can be more flexible and find a cheaper plan”
    VZW: “Hmm, Well we can accommodate you with a cheaper plan without you switching to prepaid”
    Me: “No thanks. Just switch me over.”
    VZW: “Are you aware that you’re currently paying $40 for your phone now?”
    Me: “Yes, i’m aware of that and the rest of the fee’s that apply. All of that together is more than i’m willing to pay for. Just switch me over, I’m fully aware of what i’m doing.”
    VZW: “*grumble* Alright, I’ll be happy to assist you with that sir.”

    I can’t knock people for sticking with contracts, it’s easier and less of a hassle up front. But my goodness, prepaid freedom is on another level of awesome.

  • matt

    If you have a 10gb plan and your phone is less than $600 off contract, buy your phone out right: https://www.verizonwireless.com/news/article/2014/04/more-everything-savings-coming.html

  • Peter Tirrell

    I disagree. My carrier is Verizon – where I live they have the best coverage for my needs. So essentially there’s no question on who is going to provide my cell service. Why would I pay out of pocket a large lump sum, and then still pay the monthly cost of the service when I could just pay the [same] monthly cost of the service and get the phone subsidized?

    Now, if Verizon offered discounted plan pricing for ‘bring your own device’ vs the standard plans I could see the point….if the number crunching worked out. But as it is now, if you’re going to be with the service for a long period of time anyway why wouldn’t you take advantage of the subsidized device pricing?

  • Higher_Ground

    The dozen or so email offers for a discounted Moto X sitting in my inbox from the past 9 months or so would beg to differ.

  • pilot25

    I think my question was deleted. If I buy a phone with verizon my monthly payment is exactly the same if I pay $200 or $600. For $400 less I’m locked to them for 2 years. If I have no intention or desire to move to AT&T or something else then how is it a bad deal for me? Where am I’m paying extra?

    If I’m off contract then VZ can jack the rate any time they want. Not so with a contract. The price is locked in.

    • Maximus

      It’s not really a question of the phone. You are going to pay for the phone one way or another no matter who you are with. The issue comes after two years. With VZW, you are paying an inflated monthly payment even though your phone is technically paid off. At TMO, your payment drops. TMO is less expensive the VZW even when you are paying the monthly payment for your phone with TMO. The only reason you would stay with VZW is for the broad, consistent coverage. That is their selling point and it’s a big one. But once TMO catches up on that end, VZW and ATT need to really start thinking about how they will compete.

      • pilot25

        Thanks, Yeah, I would never go with anyone other than ATT or VZ. I have friends on TMO and Sprint and they hate the coverage. So therefore, unless the competition steps up then a 2 year deal is good for me. I’m guessing the DroidLife authors all live in big cities where TMO and the like have good coverage. Some of us don’t have that luxury so the article is misleading. Maybe Kellex has some vitriol toward VZ but the article doesn’t hold much water when variables are included.

      • pilot25

        Thanks. I would never go with TMO or anything other than VZ or ATT and ATT is a distant second. So while I understand what Kellex is saying he is really saying he hates the mobile business. VZ has a great network and if you want on it you are going to pay the piper. When the competition steps up then VZ with have to rethink its business model as demand drops. Its supply / demand and right now the latter is large and plentiful.

  • schoat333

    If your buying a VZW phone, and using VZW’s overpriced network, then yes, you would eb dumb not to do a contract. Its not like you can bring your own phone to VZW with their BS rules, so you almost have to buy the phone from them anyways.

    I’ll stick with T-mobile, save $60 a month on two lines, get unlimited data with free Rhapsody premium, and be able to use a Nexus with no contract.

    • Hey, any word on Google Play Music and the whole unlimited data thing?

      • Ryan Chapman

        Google play isn’t on there yet, but Spotify Iheartradio, Pandora, and Slacker are…I was a google play person, but now with these other options I don’t really miss it much

        • I know it was leading the voting, I just wonder when it’s coming?

          • Ryan Chapman

            I’m not sure about that, I voted for it too, but I haven’t heard any updates about anything

  • imronburgundy

    The problem is that there is no incentive for normal users to not subsidize their phone cost. The price of service with buying a subsidized phone versus bringing your own device is the same, from what I can tell.

  • Rich

    This site is becoming such a big joke. Nothing important to report and as always reporting feelings and their opinions. There’s 2 options 1 with contract one without. Plus if you are so unhappy then leave your carrier if you are going to save a lot of money when you switch stop complaining and leave them. Add your effort what your paying monthly and figure out how fast you can break even by switching. If you stay it’s like being in a marriage with someone you hate why do it and put yourself through it. Vote with your wallet not your voice. And kellen Stfu.

    • scotch1337

      Go somewhere else?

    • Ryan Chapman

      Hmm. Well let me take your comments as inspiration to say “IF you are so unhappy with the content, then leave.” And Rich STFU.

    • Ian

      Opinions have always been a part of the content and therefore their success. Took ya a while to figure that out.

      As you know you are also entitled to your own opinion but try to leave the personal attacks out of it.

  • John Malin

    What many carriers don’t tell you is that you need to pass a credit check in order to get onto the EDGE or NEXT plan. AT&T has their own credit score program, rated from 0-999, and you have to have a certain score to get the plan. Mine was 759, and you needed 760 to get it. I wonder how many people get screwed out of that 1 pt.

  • yummy

    When smithbarney talked, people listened. When whorizon talks, I just hear:”BABABABABA BABABABA”

  • Lunas Eclipse

    it is cheaper to buy a phone at full price than it is to join one of the new tiered plans…

  • LaFave07

    All of this 2 year contract/phone unlocking talk will really matter in about 6 -8 years when every carrier will be strictly LTE for data and voice.

    It’s not as important right now when really the only carriers that can use each others hardware are AT&T and T-Mobile (you can also use Verizon phones on these carriers). But in 6-8 years, every phone will be compatible with every network and switching carriers will be much easier using whatever device you want as long as it’s unlocked and you aren’t stuck in a contract.

    • hkklife

      They (the big domestic three) will always find a way to screw their users. Especially Verizon.