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A Contract for iPhone is (secretly) optional
Author: George Bandy
In order to use Apple's new iPhone you have to sign up for a two-year contract with At&T, the only network which is available as a service provider with iPhone. Right? Wrong. Probably the only surprise left about iPhone and its AT&T partner by the time the phone finally released was the fact that there is an easy way to avoid the contract, which will cost you a minimum of $1400 over the two years. What's the way to beat the long-term commitment involved in iPhone ownership? Just have bad credit.
Customers who buy the mega-hyped iPhone but don't meet the credit requirements for the AT&T service contract will be able to keep and use the iPhone without having to commit to a two-year contract.
AT&T and Apple had said prior to the phone's launch that customers would be have to sign a two-year contract in order to buy the iPhone. However, the companies did not announce that customers who do not meet the credit standards will have the option of paying for their service on a month-to-month basis, avoiding what many consider one of the more restrictive service plans in the industry.
After buying an iPhone, a consumer must go to Apple's iTunes internet music store to activate it. When the devices actually went on sale, AT&T ran credit checks on customers who came to its stores to buy the iPhone. Apple stores did not bother with the credit check. When activating the phone, AT&T customers had been given a code for the iTunes site, and were already approved for service. That let them skip some steps in the activation process. Consumers who bought at Apple stores would have to go through the full step-by-step process, including the credit check, on line, and if they then found out that they were not eligible for service, they were offered a prepaid plan, which requires customers to pay for airtime in advance.
Prepaid call charges are more expensive than charges for customers who qualify for the service contract and pay monthly bills, but prepaid customers do not have to commit to keep the service for two years. What seems unfair here is that the availability of a pre-paid option was never announced, and that consumers are not being presented with that option as a choice they can make. Only after the customer's credit is rejected, which you wouldn't even know until after you'd bought the iPhone if you bought it directly from Apple, are you given the option.
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About the author:
George Bandy is a contributor and manager at numerous websites, including City of Tallmadge and Babblefest
This article is copyright (c) 2007 George Bandy, all rights reserved, and may not be reproduced without permission.
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