Ask LH: Why Do I Have To Pay A Full Month When I Cancel My Internet Contract?

Dear Lifehacker, When I signed up with an ISP in the middle of the month, they charged me the pro-rated amount to cover the partial month. However, when I moved out in the middle of the month, they charged me for the entire month. Is this legal? Shouldn't I be able to pay for just the prorated amount? Thanks, Short Changed

Photo: Shutterstock

Dear SC,

A dispute like this will usually come down to the specifics in your contract. Unfortunately, the contract will have been carefully designed to keep the ISP's bases covered at the expense of your own. (It's no accident that lawyers are hired to draw these things up.)

That multi-paged tome you signed doubtlessly contained the aforementioned caveat somewhere in the terms and conditions — all of which you agreed to when you added your signature.

In any event, charging you the full amount on the month of cancellation doesn't really violate any consumer laws. For that to be the case, the plan would need to contain a promise not to charge you for internet you don't use — it's unlikely that your ISP made any such pledge. In other words, you're just going to have to put up with it.

With that said, nobody's forcing you to feel cheated here. Instead of getting annoyed about the final bill, try to think of the initial pro-rated payment as a bonus (after all, the ISP could have pulled the same trick during the month of signup). It's all about how you choose to perceive the situation.

Our advice is to stop obsessing over what you technically owe and accept that you'll always have to pay a full month if you quit. On the bright side, at least you're not locked into a lengthy contract.

On a final note, it never can hurt to ask for a refund. Contact your ISP and politely inform them about the charging anomaly you experienced during cancellation. Explain that you may want to reconnect with them in the future and that their corporation on this issue would definitely help to make you feel like a valued customer. Basically, spout any old crap that you think might sway them. The worst thing they can do is say no!

If there any readers with advice of their own in this area, please let SC know in the comments section below.

Cheers Lifehacker

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Comments

    Actually you don't have to pay the full month. If you give them more than adequate notice there is no reason for them not to pro-rata the refund. I've had cancel my IT connection a number of times and given the ISP 2 weeks (the same time I got from the real estate) in both instances and a pro-rata refund was either given without asking or without having to push.

    There is a caveat here. If you go over the monthly limit in the time before the contract is terminated they can effectively say you've had the full 'service' allowed in your plan and refuse it. But I've only heard of one instance of this being used on a friend.

    The ISPs already know that if you're out of contract and you've given them this notice they have no reason to hold onto the cash. And dealing with the complaint which ends up in the hands of the TIO is just not worth it. Each TIO complaint costs the ISP $200. So it's always cheaper for them to do the right thing.

    If you've been with your provider for the full term of the initial contract e.g You signed up for 12 months or 24 months. Then you shouldn't have to pay anything and get a refund for the remainder of the month that you have not used as you are essentially on a day by day, month by month contract. I could understand them charging you if you were cancelling say 18 months into a 24 month contract, the same as mobile phone plans.

    pretty much check out the terms and conditions, but as someone who's worked for one before, there's usually a clause that states that regardless of the date of cancellation, it's up to your ISP's discretion as to whether you're entitled to a refund when you're cancelling your account on your own accord (eg, it was your choice to cancel as opposed to your account being cancelled because of repeated problems caused by your ISP). Their discretion usually only lasts as much as 24 hours, or an accidental billing that occurs mid-termination.

    Perhaps I'm the one asking the silly question here but why didn't you cancel the contract before it ticked over onto the next month?

    <Blatant Plug>

    If you'd signed with Bendigo Bank Telco (http://www.bendigobanktelco.com.au) you would've only been charged a pro-rated month when you leave. They care about their customers.

    You must've signed with a dodgy provider... I can't imagine why you chose to leave them.

    </Blatant plug>

    Last edited 02/07/14 8:16 pm

    I left iPrimus years ago and asked them before i left how much to close the account which i paid. 18 months later a debt collector letter came in the mail for another full months payment plus costs. Tried to argue the point for a while but it wasnt worth it and ended up paying it to make them go away. NEVER going back to iPrimus even if its the last ISP on earth, and i was happy with them before that. 0/10

    It really comes down to your ISP's SFOA (Standard Form Of Agreement). Some Telco's and ISP's are greedy and WILL charge you for a full month even if you leave within the first couple of days, contracted or not. They justify this by stating that they need to cover their own ongoing costs to keep services active within the infrastructure or wholesale services you may have been connected to.

    Best advice here is if you're thinking of switching, find out your current providers cancellation policy, then weigh this against your new provider. Ask your current provider to do a health check on your current account: Will you be better off changing plans to something more suitable to your needs, without having to renew contract? Does the provider offer an option to relocate services (if you need to move house) and if so, how much? If you could relocate your service, take a more usable plan and relocate without breaking contract, then everyone wins.

    If changing to a new provider, don't hesitate to ask your new provider about their cancellation policies, contract policies and break fees; they're obliged to tell you this.

    Finally, if a provider has a SFOA (they all will), go read it!

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