In too deep? There are ways to get out of or around contracts
I like to think I'm a careful consumer. Whether I'm in the market for a new TV or insurance policy, I do a lot of research and shop around.
Sooner or later, we all fall victim to buyer's remorse. In a best-case scenario, you can return an item or exchange it, but what if you signed a contract?
I frequently get e-mails from people trying to get out of commitments they've made to cell phone companies, gyms, satellite TV services or car leases. Sometimes they just can't afford them anymore. In other cases, they've found a cheaper but comparable option or they're just not satisfied with the service.
I can relate. Once in a while, I come across a new cell phone company or plan and wonder if it would be worth breaking my contract with our current carrier. Sometimes I decide the rates are too good to be true — service must be spotty for $40 a month, right? — and other times I do a cost-benefit analysis. In most cases, the cost of early termination cancels any savings. I've often thought there must be loopholes, so I did a little digging. Here's what I found out:
• Consumers get the short end of the stick. Think about it: Most of the contracts we're talking about come from big corporations, and big corporations have big lawyers.
"These things have been reviewed over and over by their attorneys, and typically they're not too sympathetic to you. They've anticipated making X over a two-year period, and the charge to terminate early is to mitigate the loss they're taking," said Brien Kelley, a Studio City, Calif., contract lawyer.
You, on the other hand, would rarely think to contact a lawyer before signing a cell phone or gym contract. Many people don't even read these contracts carefully, let alone word for word, and that's a mistake. Read them and you'd understand: It's hard to get out without paying a fee. The next time, learn what you're agreeing to before you sign on the dotted line.
• Look for a termination clause. There may be circumstances when you can terminate without penalty. Moving is a common one — it can usually get you out of a gym membership if you no longer live near a facility or a satellite TV contract if they don't have service in your new area. Most gyms also have exceptions for sickness or injury, provided your doctor will document it.
There may be promises or commitments made by the company — if they break these, you'll have a strong argument, said Kelley, because it may be considered a breach on their part. This is a fine line, though: Saying your cell phone or satellite service cuts out likely won't work out — they've probably accounted for periodic outages in the contract — but a change in service or price might.
If your gym was open 24 hours when you signed up but now it's not, or your satellite bill shot up after the first year of your two-year contract and that wasn't part of the deal, you should certainly make a call.
• You may need to haggle. If you can explain your situation clearly, and it's logical, you may have a shot at a price break.
"Remember that the situation ultimately comes down to people dealing with other people. Getting angry, or being mean or uncooperative, is the worst mistake you can make. Instead, try to explain the reason you need to break the commitment. Make it personal and try to tug at the other person's heartstrings," said Steve Hague, an expert negotiator and the owner of ProAutoBuying, a company that helps consumers buy or lease cars.
Don't be afraid to ask to speak to a supervisor. If that doesn't work, have alternative solutions up your sleeve, such as having someone take over your contract. Or try to negotiate the termination fee. Be sure you're current on your bill before you call; they'll be less likely to help you if you're behind.
• If all else fails, think baseball. I know, the trading deadline passed, but consumers don't have these kinds of time horizons. There are lots of services that will help you get rid of a car lease or cell phone contract. You'll pay a price, but it will likely be less than the cost to fulfill your contract or pay the termination fee.
For cell phone plans, I like CellSwapper.com, which charges $18.95 to post your cell phone plan and allows you to offer incentives to lure potential buyers, like cash, your phone or accessories.
If you want to get out of a car lease, try LeaseTrader.com, which charges $89.95 to run an ad until the vehicle sells or the lease transfers, and $149.95 for a transfer fee. Some lenders may also charge a fee, so be sure to ask about that upfront.