Verizon removes termination fees, adds customer loyalty benefits

Verizon Wireless announced yesterday that they will begin to pro-rate early termination fees in the fall, while simultaneously adding new customer loyalty benefits in hopes that early termination will be a non-issue.

Verizon is the first major U.S. carrier to commit to a national policy to pro-rate the ETF. A Verizon spokeswoman said that the policy is being enacted to address an industry-wide complaint of consumers. As such, she expects that they will maintain their customer base. “We have the most loyal customer base in the industry as judged by our very low churn rate,” said a Verizon spokeswoman. “We also have the highest ratio of customers that come in. We are hoping that the quality of our service keeps customers with us.”

The new termination agreement will progressively reduce the amount a customer has to pay if they terminate their contract with Verizon before their committed term expires. The pro-rate will apply to contracts signed or renewed after the policy is enacted, and the amount owed will vary depending on the time remaining in the contract.

In addition to pro-rating ETFs, Verizon will add its Worry Free Guarantee for customers who pay their bills online. Under the new guarantee, customers will receive e-mails notifying them if a price plan better matches their usage needs. In addition, customers will pay no more than $50 for a replacement phone purchased outside of the manufacturer’s warranty and can choose to have Verizon store their phone contact list on its network so that it is easily transferable. Further, the new policy allows any customer with a $49.99 or higher price plan to upgrade their primary handset after 12 months at the current price.

In his speech announcing Verizon’s new policies, Denny Strigl, president and CEO of Verizon Wireless, discussed how the wireless industry has the ability to transform itself in the upcoming years by continuing to add value for customers through technology and responsiveness.

“Our ability to continue to transform the wireless business depends on what we do with the intelligence in our networks--and the intelligence our customers are feeding to us--to provide new compelling value for the customer,” he said.