Originally Posted by Okapdroid
That is still essentially a contract! You owe T-Mobile a 'balloon payment' for the balance of phone plus a $200 early termination fee. Even though you're signing up for their data rate plans which they call 'Simple Choice Plan'. There's no such thing as a contract free phone with the major U.S. wireless carriers unless you go buy a prepaid phone (e.g. Tracfone) and add minutes to it whenever you run low to extend your service contract.
Don't be fooled by T-Mobile's marketing.
They'll still run a credit score report on you even if you're buying the phone outright for $629.99. You may still be required to put down a security deposit plus down payment to activate a new line of service through T-Mobile, again all depending on your credit score! Even though T-Mobile CEO has thrown out the two-year contract verbiage you're still essentially signing an agreement and/or contract with T-Mobile for wireless service.
If it was truly a no contract
phone then there wouldn't be any need nor reason to obtain a credit score report or pay a penalty fee if a person decided to terminate the agreement early.
Where are you getting this $200 early termination fee on their simple choice plans? I signed a contract for the EIP on the phone and says if I cancel service then I owe the balance of the phone. There is nothing about an early termination fee and there is/was no contract for the monthly plans themselves. It might be different for special offers. Its common sense though. People cant expect to make monthly payments on a phone, cancel service and get away with not owing the balance of the phone. I've been with t-mobile for many years and when I just bought my GS4 they never checked my credit because I have a history with them. I was easily able to go online and put a down payment on the phone for the advertised price. New customers will of course have their credit ran for EIPs.
The $200 early term fee will apply to current customers under a current contract who switch to the new plans. Such as my wife who is under a contract from before. I could cancel my line though easily with no term fees, but will have to pay the phone off.
Classic plans will continue to have 2 year deals with early termination fees.
There is a migration fee for those who are on an old plan (that wasnt a value plan) who want to switch to the new plans, but only if under a current subsidized contract.
Those on value plans can easily switch.
Its pretty simple though. Read the terms of service for whatever you are getting. A lot of people just arent understanding how these new plans work and need to read the terms.