BBB says a contract’s fine print is not always a fine deal

Cellphones. Cable or satellite TV. Internet service. Gym memberships.

Most consumers feel like they cannot do without these modern conveniences.

But all of these things have one thing in common: They often come with contracts, and those contracts come with fine print. Too often that fine print brings headaches for the consumer.

Here are some tips if you are about to enter into a contract relationship with a provider.

ETFs

Early termination fees, or ETFs, are often a problem for consumers who sign contracts.

An ETF is a fee that you agree to pay for ending a service contract before the expiration date. The amounts can vary greatly – between $95 and $450, according to Money Magazine.

They may be prorated over the term of the contract, but those rates can vary. Interestingly, an FCC survey found that only 36 percent of cellphone customers familiar with their bills said their service provider’s contract included “very clear” info about the ETF.

Here’s what the FCC Consumer Task Force advises:

▪ Ask about and be fully aware of the ETF when signing a contract, especially for phone service. Ask how much it is and how it will be prorated.

▪ Know that making a change later in your contract, like purchasing a new phone or adding minutes, could trigger a new two-year contract with yet another ETF.

▪ Find out about the trial period (typically 14 to 30 days) during which you could cancel the service without an ETF penalty.

▪ For those who use their phones sparingly, consider buying a prepaid phone with no contract and therefore no ETF issues.

Read the fine print

Signing up with a contracted service is almost always easy. There may be a credit check and usually a verbal or online agreement.

That ease is in sharp contrast to the hassles involved in canceling a contract or service agreement. The company’s representatives will always try to talk you out of canceling and there will usually be a good deal of paperwork that you have to complete.

Remember that once you have signed a contract you are locked in and all those attractive offers and better deals from other companies are off limits.

Plus you may be obligated to fulfill the contract even if you move away from the service area. Be sure to check into this possibility before signing.

The company that you sign with may have price reductions in the future that you cannot take advantage of because of your contract. Any initial savings that you think you got with the introductory promotional offer can be, and almost always are, mitigated by the long run cost of the contract.

Do not ignore the fine print. It’s hard to read for a reason. There is information there that the provider may just as soon have you overlook. For instance, with your phone contract you may be also purchasing a pricy data plan.

You may be charged full price for your “free” movie channels after the introductory offers expires or pay more for faster Internet connection speed.

ETF issues are usually in that fine print as well.

Tread carefully when it comes to signing contracts. Cautious deliberation always pays off even when it means struggling through the fine print.

This story was originally published June 26, 2015 at 2:40 PM with the headline "BBB says a contract’s fine print is not always a fine deal."