RARPSL
join:1999-12-08
Suffern, NY
| What is the Supposed Function of EFT?
It is my impression that it is supposed to be a reimbursement to the Cell Company for the amount that they subsidize the phone (ie: The difference between the cost to the customer for the phone under a contract and if they buy the phone outright). Thus if it costs me $240 more to buy the phone than go with a 2 year contract, the EFT should be $240 and the reduction should be $10 per month (ie: I should only owe $10 if I cancel after 23 months).
If they want to treat the EFT as a loan against the non-purchase subsidy, then amortize the subsidy and compute it that way with the EFT reductions paying off 1 months interest with the remainder paying down the Premium Amount (ie: Original Subsidy).
This owning a significant amount just prior to the end of the contract is what in the Loan Field is known as a Balloon Payment and is IMO a ripoff - Especially when it is falsely claimed to be a prorated (ie: Full Pay Out) discount. |
