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Isn't the purpose of locking the phone to the network meant to stop customers from signing up for a plan that subsidizes the cost of the phone, canceling the pl

Isn't the purpose of locking the phone to the network meant to stop customers from signing up for a plan that subsidizes the cost of the phone, canceling the plan 6 months later, and taking that now heavily discounted handset to a competitor? I don't see a problem with this basic model, so I'm curious to know where the problem lies. I seem to be missing something.

core-utility 4y ago
That's typically what cancellation fees or early termination fees are for.
- sidewndr46 4y ago
  But are those actually enforceable? You'd have to take someone to court to get wage garnishment for the value.
  - etiennebausson 4y ago
    That might be the justification, though they given the amount they sink into lobbying, a solution would have long been found if the pushed for it. Much better financial incentive to lock in your clients and blame it on unenforceable laws.
  - pc86 4y ago
    Wage garnishment is a $500 solution for a 50 cent problem. If you owe money on the phone, it's not your phone. Whoever you got it from should have the ability (technically and legally) to just brick it remotely.
    - vinceguidry 4y ago
      Of course it's your phone. That's how modern finance works. The only purchases you're likely to make that accrue equity in a legal/contractual framework are cars and homes. Once that phone is in your hands, it's yours to do with as you wish.
      - pc86 4y ago
        The last couple years notwithstanding, cars are about the least likely thing to accrue equity. If you have a loan on something, it's not yours. If you stop paying your car payment, they take it away. If you stop paying your mortgage, they kick you out. (And neither of these absolves your financial responsibility). I don't think it's particularly surprising to suggest that if you haven't paid for your phone yet, whoever gave it to you still owns it. But I never suggested you can't "do with it as you wish" only that bricking the phone was a perfectly reasonable way to ensure that it was paid for in full in the example of someone getting a subsidized phone but wanting to switch carriers a few months in - which should be allowed, provided you pay back the subsidization.
        vinceguidry 4y ago
        > If you stop paying your mortgage, they kick you out. (And neither of these absolves your financial responsibility). 12 states have 'non-recourse' mortgages, where if your mortgage is foreclosed on, the lender has no legal avenue to recover the difference if sale does not recover the principal. More generally, what provides for recourse isn't the vague idea that 'you're still making payments'. It's a signed contract saying they can. No contract, no recourse. Contract terms for things like cars and homes are heavily regulated. Cell phones are getting there.
        sidewndr46 4y ago
        I believe you, but how does that work? For example the federal government commonly buys mortgages. Since the federal government buys the mortgage, wouldn't it void out any state law around the mortgage?
        vinceguidry 4y ago
        Foreclosure is a common-law procedure, subject to the laws of the state that the mortgage was taken out in. When the government needs to foreclose, they file it the same way everyone else does.
  - CogitoCogito 4y ago
    Isn't it usually the other way around in the US? Can't they just send you a bill and then send it to collections if you don't pay? Seems like usually the onus is on the debtor to prove the debt isn't legit not the other way around.
    - sidewndr46 4y ago
      Collections in the US can't really do anything from my experience. I had some $24 debt that when I offered to settle the debt collector hung up on me. Sure if you owe someone $150,000 and have a net worth of $500,000 they'll take you to court. But over a cell phone, that probably is not going to happen. Also when the debt is sent to collections the originator only gets about 1/10 the cost.
      - CogitoCogito 4y ago
        The threat to send it to collections does have some power to convince people to pay.
        sidewndr46 4y ago
        Yeah I didn't really consider that perspective.
      - thayne 4y ago
        They can ruin your credit score and make it difficult or impossible to get any new credit/debt.
- kube-system 4y ago
  Only works for post paid plans.
MBCook 4y ago
That’s the theory. But often they’re locked as policy even if you buy the phone outright. I think Verizon locks all phones purchased from them. They’ll unlock them after 30-60 days if you ask and don’t owe on the phone. But why should that be the case at all? If someone gets a subsidized phone and runs away, charge them for the phone and send it to collections. Too many people doing that? Don’t give away phones so easily.
- Overtonwindow 4y ago
  No, it’s totally anticompetitive practices. If you buy the phone out right that phone should not be locked at all. The only conceivable reason why it would be locked is so that the carrier is attempting to prevent you from going to another carrier.
  - MBCook 4y ago
    I agree completely. My comment was to point out it’s not just subsidized phones. They lost on number portability. They’ve still got this (for now).
- stevehawk 4y ago
  Verizon's new policy is that all phones are unlocked automatically after 60 days. I have yet to test this, but publicly that's their policy now.
  - kotaKat 4y ago
    Can confirm, as an iPhone user. Pre-60 days it says "Carrier locked" in Settings, post-60 days after a profile settings update it flips to "SIM unlocked"
  - thedougd 4y ago
    Can also confirm. The lock also prevents a second sim. Stupid.
- dboreham 4y ago
  My experience has been that Verizon phones have not been locked for many years. I've used European carrier sims in my Verizon phones many times.
berkeleyjunk 4y ago
What you are probably missing is that the subsidy is not a lump sup at the time of purchase. e.g. If you get a phone subsidized by $720 from the MSRP the carrier provides a subsidy of $30 per month for the next 24 months or $20 per month for the next 36 months. If you leave early the credits stop and the remaining balance is due. The problem here is that even after the phone is paid off it remains locked to the operator.
NonNefarious 4y ago
The user can't "cancel the plan," though. It's a CONTRACT. That's why the entire scam is backward. Under contract, the user has to pay the original company every month. It's actually GOOD for that company if the user takes his phone elsewhere, because now he has to pay for service he's not using. That's why locking the phone is mind-bogglingly stupid.
- deleted 4y ago
  [deleted]

core-utility 4y ago

That's typically what cancellation fees or early termination fees are for.

sidewndr46 4y ago
But are those actually enforceable? You'd have to take someone to court to get wage garnishment for the value.
- etiennebausson 4y ago
  That might be the justification, though they given the amount they sink into lobbying, a solution would have long been found if the pushed for it. Much better financial incentive to lock in your clients and blame it on unenforceable laws.
- pc86 4y ago
  Wage garnishment is a $500 solution for a 50 cent problem. If you owe money on the phone, it's not your phone. Whoever you got it from should have the ability (technically and legally) to just brick it remotely.
  - vinceguidry 4y ago
    Of course it's your phone. That's how modern finance works. The only purchases you're likely to make that accrue equity in a legal/contractual framework are cars and homes. Once that phone is in your hands, it's yours to do with as you wish.
    - pc86 4y ago
      The last couple years notwithstanding, cars are about the least likely thing to accrue equity. If you have a loan on something, it's not yours. If you stop paying your car payment, they take it away. If you stop paying your mortgage, they kick you out. (And neither of these absolves your financial responsibility). I don't think it's particularly surprising to suggest that if you haven't paid for your phone yet, whoever gave it to you still owns it. But I never suggested you can't "do with it as you wish" only that bricking the phone was a perfectly reasonable way to ensure that it was paid for in full in the example of someone getting a subsidized phone but wanting to switch carriers a few months in - which should be allowed, provided you pay back the subsidization.
      - vinceguidry 4y ago
        > If you stop paying your mortgage, they kick you out. (And neither of these absolves your financial responsibility). 12 states have 'non-recourse' mortgages, where if your mortgage is foreclosed on, the lender has no legal avenue to recover the difference if sale does not recover the principal. More generally, what provides for recourse isn't the vague idea that 'you're still making payments'. It's a signed contract saying they can. No contract, no recourse. Contract terms for things like cars and homes are heavily regulated. Cell phones are getting there.
        sidewndr46 4y ago
        I believe you, but how does that work? For example the federal government commonly buys mortgages. Since the federal government buys the mortgage, wouldn't it void out any state law around the mortgage?
        vinceguidry 4y ago
        Foreclosure is a common-law procedure, subject to the laws of the state that the mortgage was taken out in. When the government needs to foreclose, they file it the same way everyone else does.
- CogitoCogito 4y ago
  Isn't it usually the other way around in the US? Can't they just send you a bill and then send it to collections if you don't pay? Seems like usually the onus is on the debtor to prove the debt isn't legit not the other way around.
  - sidewndr46 4y ago
    Collections in the US can't really do anything from my experience. I had some $24 debt that when I offered to settle the debt collector hung up on me. Sure if you owe someone $150,000 and have a net worth of $500,000 they'll take you to court. But over a cell phone, that probably is not going to happen. Also when the debt is sent to collections the originator only gets about 1/10 the cost.
    - CogitoCogito 4y ago
      The threat to send it to collections does have some power to convince people to pay.
      - sidewndr46 4y ago
        Yeah I didn't really consider that perspective.
    - thayne 4y ago
      They can ruin your credit score and make it difficult or impossible to get any new credit/debt.
kube-system 4y ago
Only works for post paid plans.

MBCook 4y ago

That’s the theory. But often they’re locked as policy even if you buy the phone outright. I think Verizon locks all phones purchased from them. They’ll unlock them after 30-60 days if you ask and don’t owe on the phone. But why should that be the case at all? If someone gets a subsidized phone and runs away, charge them for the phone and send it to collections. Too many people doing that? Don’t give away phones so easily.

Overtonwindow 4y ago
No, it’s totally anticompetitive practices. If you buy the phone out right that phone should not be locked at all. The only conceivable reason why it would be locked is so that the carrier is attempting to prevent you from going to another carrier.
- MBCook 4y ago
  I agree completely. My comment was to point out it’s not just subsidized phones. They lost on number portability. They’ve still got this (for now).
stevehawk 4y ago
Verizon's new policy is that all phones are unlocked automatically after 60 days. I have yet to test this, but publicly that's their policy now.
- kotaKat 4y ago
  Can confirm, as an iPhone user. Pre-60 days it says "Carrier locked" in Settings, post-60 days after a profile settings update it flips to "SIM unlocked"
- thedougd 4y ago
  Can also confirm. The lock also prevents a second sim. Stupid.
dboreham 4y ago
My experience has been that Verizon phones have not been locked for many years. I've used European carrier sims in my Verizon phones many times.

berkeleyjunk 4y ago

What you are probably missing is that the subsidy is not a lump sup at the time of purchase. e.g. If you get a phone subsidized by $720 from the MSRP the carrier provides a subsidy of $30 per month for the next 24 months or $20 per month for the next 36 months. If you leave early the credits stop and the remaining balance is due. The problem here is that even after the phone is paid off it remains locked to the operator.

NonNefarious 4y ago

The user can't "cancel the plan," though. It's a CONTRACT. That's why the entire scam is backward. Under contract, the user has to pay the original company every month. It's actually GOOD for that company if the user takes his phone elsewhere, because now he has to pay for service he's not using. That's why locking the phone is mind-bogglingly stupid.

deleted 4y ago
[deleted]