The majority of cell phone contracts are 24 months although there are shorter options and 36 months contracts. The shorter the contract period, the more you will pay for your handset or whatever hardware you take with the contract.

On a 6 or 12 month contract, for example, you will either pay a hefty fee upfront or much higher monthly charges for the hardware fee or both. These costs would be less on a 24-month contract and even less if taken over 36 months.

The CPA

In the past, you were bound by the term of the contract and there was precious little you could do to get out of it. Thanks to the consumer protection act or CPA, this is no longer the case. The CPA has been in effect for many years now and one of the benefits is that you are able to cancel within the period of the contract. There will be penalties involved but you can still get out early if that is what you wish.

The other import change the introduction of the CPA brought about was what happens at the end of the contract period.

In the past, the contract would continue, sometimes at an increased rate and you would have to give notice, in some cases more than a calendars months’ notice, if you wished to cancel. There were even cases of contracts automatically being renewed for a year or two. The same thing happened in other industries such as gym contracts.

What contract providers have to do now

The contract provider is now obligated to contact you at least 40 to 80 days prior to the end of the contract. They are then supposed to give the option to terminate or negotiate a renewal of the contract according to your requirements.

The act does not stipulate how they need to contact you so while the dealer or the network will often try to call you directly, they could simply send an SMS or include the notification with your monthly invoice. The main thing is that they cannot extend the period and after the initial contract has expired, you are free to cancel if you so wish.