Scam Alert: AT&T’s “Next” and Verizon’s “Edge” Still Not Addressing Transparency Issue

Good news for phone lovers who want to upgrade every year instead of every two years! AT&T and Verizon have essentially come out with leasing programs called “Next” and “Edge,” respectively. On AT&T’s “Next,” for example, you can have a Galaxy S4 for $27/month installments with no down payment, which comes to $324 for the year.

Not bad, says you. Not so fast, says I. Both carriers continue to charge around $20/month in hidden phone subsidy fees, even if nothing is being subsidized. That’s an additional $240 a year for absolutely no reason whatsoever, which comes to a total of $564/year for a phone you can’t keep; you have to trade it in. You’ve almost paid the full retail price of $650 for that phone!

On “Next,” the only way you get to keep your phone is once you’ve paid 20 monthly “Next” installments. But by then you would have been stripped of an inglorious $940 in “Next” and hidden subsidy fees, which means overpaying $290 for a $650 phone.

So, Verizon and AT&T are making no effort whatsoever in becoming more transparent and happily continue to cheat you out of your money. In fact, these new pseudo-leasing plans are a new way to get more money out of you. Of course, businesses are in the business of making money, not losing it. But by bundling the arbitrary ~$20/month in your monthly bill no matter what, these two carriers are doing it in an antiquated, and frankly crooked way .

When will these carriers confess that they charge customers an added ~$20/month to make up the difference for a subsidized phone? And why do they continue to advertize that they sell new phones at a discount when they’re really not? The more customers become aware of this hidden subsidy fee, the worse they’re going to look when they finally admit it.

Solution? Check out AT&T’s updated GoPhone plans, which look more like T-Mobile’s UnCarrier plans. Better yet, go straight to T-Mobile and sign up for an UnCarrier plan if your area is covered by its purple, no-contract goodness. You pay full price for a phone and pay nothing more than the carrier’s service (around $50/month compared to AT&T’s and Verizon’s $100+/month), which saves you money in the long run.