Can Cell Phone Companies Charge You a Cancellation Fee?


When you shop for a new cell phone, you may notice that some phones are significantly discounted in association with a promotional offer. This offer usually includes the phone for little to no cost in exchange for a multi-year service contract. The cell phone provider is willing to cut the cost of the phone since they can recoup their money during the contract term in subscription fees. When you break your contract early with promotional phones, the cell phone company is not likely to waive penalties since the product was purchased with a heavy discount. There may be exceptions depending on how long you have been a customer.


A cancellation fee is a standard penalty for breaking your cell phone contract early. Amounts vary, but generally equate to several months of billing. You may qualify for a waiver from your cell phone provider, but these circumstances are based on your ability to negotiate, your reason for cancellation and your account history. For example, loyal customers forced into a new service plan that doesn’t fit their needs may have grounds for cancellation with a fee waiver.

Fee Amounts

Cancellation fee amounts vary, but they are usually higher than the amount of your monthly bill. Some cellular companies may change up to $250 in cancellation fees. If your cell phone bill is only $50 per month, for instance, this equates to five months of billing.


In some cases, the service provider will drop the customer.  Though these situations are rare, customers who prove to be a liability to the cell phone provider may be dropped without incurring a cancellation penalty. Reading the fine print in your cell phone contract is a great way to find legitimate reasons for cancellation. Changes in text messaging prices or administrative fees are reasonable assertions when seeking to break your contract without penalty.

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