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Cancelling a Phone Contract - Deal with the problem

Deal with the problem

Step 1. Calculate your cancellation costs

If you decide to cancel your phone contract, calculate your cancellation costs. Your cancellation costs will depend on when you signed your contract and whether you received a free or discounted phone.

If you cancel during the trial period

If you cancel within 15 days of signing a phone contract (during the "trial period"), you can cancel without paying any penalty or early cancellation fee.

If you did not get a free or discounted phone

If you cancel after the trial period and you did not receive a free or discounted phone on signing the contract, the early cancellation fee can be no more than $50. The cancellation fee is the lesser of: 

  • $50, or
  • 10% of your minimum monthly charge for the remaining months of the contract, up to a maximum of 24 months

See below for an example of the cancellation fee calculation.

If you got a free or discounted phone

If you cancel after the trial period and you did receive a free or discounted phone on signing the contract, the early cancellation fee is to pay off any remaining "device subsidy". 

The device subsidy represents the discount that was given to you off of the retail price of your phone for signing a contract. The retail price is the lesser of the manufacturer’s suggested retail price and the price the service provider charges for the device without a contract.

In calculating the early cancellation fee, the device subsidy must be reduced by an equal amount each month, so that it is reduced to $0 by the end of your contract.

In calculating the early cancellation fee, a month that has partially elapsed at the time of cancellation is considered a month completely elapsed.

Example: No free or discounted phone

If you did not receive a discounted or free phone on signing the contract, the early cancellation fee is the lesser of $50 or 10% of your minimum monthly charge for the remaining months of the contract, up to a maximum of 24 months.

For example, let's say your minimum monthly charge is $70, and you have four months left on your contract.

The early cancellation fee calculation is:

  • 10% of $70 = $7
  • $7 x 4 months remaining = $28
  • and because $28 is less than $50, $28 is the early cancellation fee

Example: Free or discounted phone

If you did receive a free or discounted phone on signing the contract, the early cancellation fee is to pay off any remaining device subsidy. 

For example, let's say the retail price of the phone was $695, you paid $95 for the phone on signing the contract, and you're now in month 16 of a two-year contract. 

The early cancellation fee calculation is:

  • $695 - $95 = $600 device subsidy
  • $600 divided by 24 months = $25 per month
  • $25 x 16 months = $400 that you have paid towards the device subsidy
  • $600 - $400 = $200 is remaining on the device subsidy, and therefore is the early cancellation fee

You should be able to view your remaining device subsidy by logging into your account on your phone provider's website.

Step 2. Cancel your contract

To cancel your contract, typically you would phone, email or send regular mail to notify your service provider of the cancellation. Check your contract to see if there is a specific way they want you to cancel.

If you phone, you may be transferred to another department that will make you an offer in order to entice you to stay. For example, they may offer a special monthly plan price or to reduce an early upgrade fee. As long as you are firm and repeat your desire to cancel, they will eventually process your request. 

Your cancellation takes effect on the day that the service provider receives notice of the cancellation (unless you specify a later cancellation date). In other words, you don't need to provide 30 days notice.

If your phone is locked to your provider's network, you will have to get your phone unlocked in order to use your phone with another provider. You have a legal right to have your phone unlocked at no charge upon request. Make sure you tell the customer service representative that you want to unlock your phone before they cancel your account.