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Comment by dreen | Hacker News Reader

Sometimes people you talk to have powers to change the outcome in your favour, sometimes all you need to do is ask.

I had an experience like that last year. I was cancelling my broadband in UK with Virgin, and got a £280 disconnection fee. The person who informed me said I will have to pay it in my final bill. Then over a month later I got a call from someone who's task was to see if I need a new connection where I was going. I said no, I was leaving the country. He asked if there was anything else he could do for me. I said, "you could cancel that huge penalty fee I got.." And he was just like "Sure, no problem, done."

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A "disconnection fee"? This has to be the most absurd charge I have ever heard of.

What does "disconnecting" a customer involve, anyway? I recall having to return equipment or face a penalty to cover costs (high, but still somewhat understandable), but I have never had to pay to get off a broadband contract.

Often if you sign a yearly contract that includes a discounted monthly rate, if you cancel it before the end of the year, you have to pay the remainder of the contract remaining.

Most likely an early disconnection fee during the minimum term. Nearly everyone has a minimum term with virgin media as they only apply promotional discounts if you have a 12,18 or 24 month minimum term and the price shoots up as soon as you roll over onto the monthly.

[1] https://www.virginmedia.com/legal/fibre-optic-services-terms...

Yep, something like that. I would have had to know if and when Im moving a year in advance, which is ridiculous. I mean it's not like I read the fine print on that, so all the better that they had no problem cancelling the fee.

This is it exactly; it's kind of understandable given how they want you subscribe for a long time, and most have an exception that a high-enough ranking person can mark (even if it's just "military exception" misused).

That's just the beginning. My favorite is the concept of the pre-payment penalty: a lender can (in some jurisdictions) charge you a fee if you attempt to pay down the principal on your loan sooner than you are required to.

Canada has this for mortgages no?

Yes, other countries too, like Germany.

It's supposed to compensate banks for lost profit from you not paying interest for the entire term. Equally, a bank can't cancel your mortgage before the term ends for the sole reason that it would be able to charge higher rates for a new mortgage.

It’s somewhat reasonable. If you make a loan, and it’s paid early, you stop making the expected profit and there is no guarantee you can reinvest the funds at the same rate. Therefore you will either disallow prepayment, charge for it, or price the risk of prepayment into your interest rate. If you can’t do any of those … you will invest elsewhere until the rates go up, for there is lots of competition for capital.

But borrowers should know what they’re getting into, and have options.

In the US that would be part of the particular loan contract.

It means you have to pay attention when borrowing, but loans with that penalty likely carry a slightly lower rate for the borrower (because they are predictable for the lender). It isn't entirely arbitrary.

That's normal. You signed a contract where you take X money and promise to return X+Y money over N years. But instead, now you want to return only X+Z money when Z<Y. In some cases, it's ok, but it doesn't have to be. In fact, there could be loans where you just don't have such an option. E.g. if you buy government bonds, the government can't just give you back the money you spent and take the bond back. The fee is an intermediary option - you can do it, but for a fee. Sometimes, if they really want your money, they could give you the option for free - at least you'd pay Z, it's better than nothing. But it's no law of the universe that they must.

It's common where there's a significant installation fee (perhaps installing a fibre thing on your house) which was waived in return for a 12 or 24 month contract.

I haven't heard of (or it called) a 'disconnection' fee, but 'exit' fees are common. There's no pretence with that that there's work to do in terminating your contract, it's just, oh, you signed up for 24m, you want to leave in month 18, ok no problem but we'll sting you for £X because the alternative is probably you have actually technically committed legally to 24 months so in a way although it doesn't feel like it we're doing you a favour. ... It's pretty shit I think for tenants in particular where the available service periods don't necessarily line up with the time they actually spend in the property.

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