AT&T to raise fees for iPhone contract breakers

Posted on May 21, 2010 at 12:00 PM

NEW YORK (AP) — AT&T is raising the fee it charges buyers of the iPhone and other smart phones if they break their two-year contracts.

Starting June 1, those buyers will have to pay $325 for breaking their contract, up from $175 currently. For buyers of regular phones, the fee is being decreased by $25 to $150.

The early termination fee goes down for every month customers stay in their contract — by $10 for smart phones and $4 for regular phones. So if a smart phone contract is broken after two months, the termination fee is reduced by $20 to $305.

The changes only apply to new contracts.

Verizon Wireless raised its smart phone termination fees in November. Federal regulators have been looking into the practice of charging higher fees for smart phones.