Buyer Beware: Web Discount Offers on Phones Come with a Catch

I would hope that most folks who see a discount on a new piece of technology do their research and read the fine print before clicking the purchase button. But we all know that’s not always the case even when discounts appear that make a new shiny gadget appear attainable for those on a budget. Red Tape Chronicles is running a piece that anyone looking for discounts and purchasing a new smartphone from an online retailer might want to read and/or file away.

In the article, Red Tape mentions Target and Radio Shack specifically. Essentially what these companies do is use a third party company called Simplexity to run this piece of their business. This is where the catch comes in. Simplexity’s terms (which are clearly spelled out if you click a link to read them before making the purchase-and everyone does that right?) state that if you terminate or change service within the first 181 days after activation, you are subject to a $400 fee. This is over an above whatever Early Termination Fee (ETF) the carrier might be charging. Simplexity says that this fee is commission that it receives from the carrier and that it needs to recover that commission from the customer if the customer chooses to cancel or change the service.

The Red Tape article chronicles a few examples of customers who have gotten caught up in this, and also has some info from Simplexity itself to try and balance out the picture. The article also points out that both Amazon and Walmart have similar practices with fees of $250 for termination within that first 181 period.

So, like everything else in life, getting that discount does comes with a potential price, if your circumstances change. I’m not sure how much of this is well known. To be honest, this was the first I’ve heard of it given that I always buy straight from a carrier or manufacturer. My reasoning for that is simple. If there’s a problem there are fewer hoops I need to jump through to attempt to get the problem resolved.

So, I’m curious. I know we have readers who purchase smartphones at a discount. Anyone run into problems with this? Let us know in comments.