Verizon to Prorate Termination Fees

Verizon Wireless said Wednesday that it would prorate the so-called "early termination fee," allowing those customers closer to the end of their contract to cancel their account at a cheaper rate than previously possible. Under the old plan, no matter at what point in their contract, the customer would have to pay a $175 fee. Now, the fee would be prorated proportionally to the time left on the contract.

The change will be applied in the Fall both for new customers and existing customers who sign a new contract. The change is not expected to affect the carrier's bottom line; Verizon has one of the highest customer retention rates of any U.S. wireless service. As well as changing the cancellation fee policy, Verizon also announced Wednesday a new plan allowing existing customers to qualify for the same phone discounts offered to new customers.