April 01, 2016
Consumer Advisory - Opportunities and Obligations of Mobile Phone Leasing
Increasingly Popular, Mobile Phone Leasing
Sprint pioneered mobile phone and tablet leasing in the United States to give consumers a new, convenient and affordable option for getting the latest technology.
Brings Opportunities and Obligations
As device manufacturers routinely introduce new devices with cutting-edge technology, phone leasing is an increasingly popular way for Sprint customers to access and upgrade to these latest devices with lower monthly cost versus purchasing the device. In fact, nearly half of Sprint customers choose to lease their devices.
In addition to the convenience of using the latest technology, though, mobile phone leasing also brings with it the responsibility of understanding the terms of the leases, including fees, maintenance costs and end-of-lease responsibilities.
Like leased cars, when the lease term expires, leased phones must be returned to the company that leased the device. Just as you wouldn’t rent a car from Avis and sell it to Hertz, you would not sell or trade in a phone leased from Sprint to another carrier.
While mobile phone users have a right to change to whichever wireless carrier is best for them, some users are inadvertently turning in leased devices to their new provider, even though they don’t actually own the devices.
Sprint respects the right of its customers to switch carriers, but we want them to make informed decisions. Starting April 4, the company will begin notifying those customers via text message of their lease obligations when they move to a different carrier.
Designed to help those customers comply with their lease terms, the text will read: “NOTICE-Sprint is processing your number porting request. Per your lease, return the device to Sprint or pay the full balance before selling or trading.”
A leased phone traded in improperly to another operator could not only generate significant fees to the consumer, it also increases the cost of service and creates delays as carriers sort out ownership of the phone.
For those leasing or considering new lease options, the CTIA – The Wireless Association, offers the following tips:
- Remember Your Device is Leased. Just like leasing a car, you don’t own a leased phone and will generally need to return it at the end of your agreement. The economics may make sense for your household, especially if you always want the newest device.
- Consider Insuring Your Device. And just like a car, you need to return the phone in good condition. You should consider whether you need to protect yourself in case of damage or loss by insuring your phone with your operator or a third party insurance company.
- Be Careful When Trading in Your Device. Leasing is popular, in part, because you can trade in your old phone with your carrier for a new device. Just be careful, and don’t accidentally trade in your leased phone to another carrier.. After all, you would never trade-in a leased Toyota at a Honda dealership!
- Know Your Options. The good thing is at the end of your contract you can typically elect to buy your leased devices, or trade in your phone for the newest model. Once you elect to buy your phone, it is yours to sell or trade.
- Know Your Agreement if Switching Providers. Wireless companies offer financial incentives and promotions to switch providers – a great consumer benefit – but some deals require you to trade-in your phone to qualify. Remember, if you lease your phone, you likely aren’t eligible because you don’t own your phone. You can take advantage of great new offers from other operators at the end of your lease or if you satisfy the terms of your leasing agreement. Check with your provider to learn more about your specific leasing terms.